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Beginning in January 2011 Mechanic’s Lien Claimants will be Required to Serve Project Owners a Specified Notice Before Recording Their Lien

by | Nov 2, 2010 | Mechanics Liens, Stop Notices And Payment Bonds

At present, to record a mechanic’s lien a claimant need only to complete and execute a claim of lien form and record the same at the county recorder’s office in the county where the project was located. The claimant has no obligation to inform the project owner that the lien has been recorded. Occasionally project owners first learn that their property is subject to a mechanic’s lien when they are served an already filed lawsuit seeking foreclosure of the lien.

Even when project owners are informed that a mechanic’s lien has been recorded, they may not understand the nature of a mechanic’s lien and how it can threaten their interest in the subject property.

Both of these scenarios can prohibit an early, informal resolution of the dispute, which is often detrimental to both parties, and – needless to say – the over crowded civil courts.

Modifications to Civil Code section 3084 which will go into effect on January 1, 2011 will seek to ensure that project owners are informed immediately that a mechanic’s lien has been recorded and provide them with basic information about the nature and possible impacts of the lien.

When the modifications go into effect claimants will be required – before they record their claim of lien – to, 1) include in their lien document a specified notice which is set forth in Section 3084(a)(7); and 2) mail the lien document to the project owner via registered, certified, or first-class mail and include with their lien document a proof of service affidavit.

The specified notice includes basic information regarding mechanic’s liens, including the fact that the liened property may be subject to a lawsuit seeking a foreclosure sale. The proof of service affidavit is to be recorded along with the claim of lien.

The modified version of the statute specifically provides that the failure to serve the lien document and specified notice as provided therein shall invalidate the said lien.

Most contractors use “fill in the blank” forms to draft mechanic’s liens. Presumably the publishers of these forms will modify their documents to conform to the new requirements. Contractors will just need to ensure that come January 2011 they are using an updated form.