Mechanic’s Lien and Homeowner’s Rights

Last Updated on Wednesday, 10 March 2010 01:14 Written by admin Thursday, 24 December 2009 08:53

In California, as in most states, any person or company (contractor or sub-contractor) that works on property has a powerful tool to make sure they are paid: the mechanic’s lien. Liens are authorized as a matter of right in the California Constitution.

If the property owner does not pay for construction work, the contractor may record a document that gives notice of its Claim of Mechanic’s Lien against the property. The document is recorded with the Recorder in the county where the property is located and will be a cloud on title to the property, signifying to the world that a contractor believes it is entitled to draw the dollar amount of its claim from the equity in the property. Depending on the type of contractor and whether the owner has recorded certain notices that construction is complete, the contractor has either 30, 60 or 90 days to record notice of its mechanic’s lien.

It is quite easy for a contractor to record the mechanic’s lien claim. It simply must prepare the single-page document and present it to the county Recorder along with any recording fees. There is no judge or jury to determine whether the mechanic’s lien claim is valid at the time it is recorded. So, as soon as the lien is recorded and without any testing of its validity, a contractor can put a cloud on the property’s title that can make mortgage lenders and potential property buyers shy away from the property.

Occasionally, and unfortunately, an unscrupulous contractor may abuse this process. Because the county Recorder will not question the merits of the claim, a contractor could record a mechanic’s lien against the property even if the owner correctly believes no money is due and owing.