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What Is A Mechanics Lien?


OVERVIEW
A Mechanics’ Lien is an effective remedy for contractors, subcontractors, and others involved in the construction or improvement of real estate to resolve payment problems. If a service or materials provider records a Mechanics’ Lien against the real estate being improved, the owner can not easily sell or refinance the property without first paying off the debt secured by the lien. A Mechanics’ Lien motivates the owner to make sure the contractors get paid, and is a prerequisite to filing a foreclosure action on the property.
Preliminary Notices
Claimants who do not have a direct contractual relationship with the owner (e.g., subcontractors) must provide a Preliminary Notice within 20 days of furnishing labor or materials to the job. This ensures that the owner is aware of a potential claimant, so that appropriate steps can be taken to confirm that the contractor is paid. Preliminary Notices must be provided to the owner, general contractor, and lender.
Click here for a Preliminary Notice form.
Mechanics’ Liens
Mechanics’ Liens are available to almost anyone who contributes labor, services, or materials to a real estate improvement project. A Mechanics’ Lien is used to exact payment out of the real estate itself by placing a lien on the property, making it difficult for the owner to sell or refinance the property, and if necessary, allowing the lien holder to go to court to have the property sold at auction.
Click here for a Claim of Mechanics’ Lien form.
Stop Notices
A Stop Notice attaches to the owner’s undisbursed construction funds, rather than to the property itself, as is the case in a Mechanics’ Lien. A Stop Notice compels the owner or lender to hold the remaining construction funds so that claimants can recover for work already completed. Stop notices are not available to claimants with a direct contractual relationship with the owner.
Click here for a Stop Notice form.
Removing a Lien or Stop Notice
Once a Mechanics’ Lien has been recorded, the claimant must file a court action to enforce the lien within 90 days. If no court action is filed by that time, the lien is no longer valid. However, many title companies don’t recognize this fact, and require that the lien be removed before you can pass clear title to a buyer. The easiest way to clear this lien is to ask the lienholder to file a Release of Lien. If they will not, you can petition the court to release the property from the Mechanics’ Lien.

(Sacramento County Public Law Library)

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2 thoughts on “What Is A Mechanics Lien?

  1. Hi, and thanks for linking our article! I'm a librarian at Sacramento Co. Public Law Library. It should be noted that the forms we post are all California-specific and may not work in Washington without alterations. I think most of the general info applies in most U.S. states, but deadlines and other details may differ.

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