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MECHANIC’S LIENS
AB 457 (Chap. 106); amends CC sections 3084 and 3146
Background: Few state laws have been subject to more efforts at legislative reform than California's Mechanic's Lien Law (CC section 3109 et seq.). This statute is a modest compromise measure. It addresses one of the most persistent problems facing homeowners – the "double payment" or "double liability" problem. This problem arises when the homeowner pays a general contractor in full, but is still subject to a mechanic's lien if the general contractor fails to pay the subcontractor, supplier, or laborer.
Existing law requires sub-contractors and suppliers (but not laborers) to give the homeowner a 20 day notice of intent to file a lien. There is a time limit (roughly 90 days) to file the lien (although many are not filed). Even if notice is given, the homeowner often believes that the contractor will pay the amount owed before a lien is filed. Present law permits a lien holder to record a mechanic's lien without providing notice to the homeowner that a lien has actually been filed and, because lien holders are not required under existing law to record a lis pendens (notice of pendency of action) after commencing a foreclosure action, subsequent buyers have no constructive notice about any cloud on the title.
The new law: Requires, as a condition of filing a mechanic's lien, the serving of a Notice of Mechanic's Lien on the property owner, or in some cases on a lender. The Notice of Mechanic's Lien must be served with a copy of the recorded lien, and has to contain information explaining the legal effect of the lien and the time periods in which actions must be commenced by the lien holder. Failure to serve the notice in the prescribed manner makes the lien unenforceable.
Existing law provides that, once lien holders commence an action to foreclose on a lien, they have the option to record a lis pendens. To protect subsequent buyers, the new law requires that a lis pendes be recorded.
For more information:
County of Los Angeles Department of Consumer Affairs
B-96 Kenneth Hahn Hall of Administration
500 W. Temple Street * Los Angeles, CA 90012-2706
Telephone (800) 593-8222 (within the County) * (213) 974-1452
Web site: dca.lacounty.gov