The California mechanics lien laws are the same as every other state, in that they are complicated and leave a lot of room for mistake. In the mechanics lien universe, one small mistake can invalidate your entire claim. Therefore, pay very close attention to this article, which outlines the five most common (and tragic) mistakes you can make when filing a California mechanics lien claim. They are in no particular order.
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Including interest, penalties or other fees in the amount of your California mechanics lien claim
What amounts you can and cannot include in a mechanics lien claim is a frequently asked question to levelset, and a commonly discussed topic on this blog. In fact, you’ll find a number of articles under the tag “Claim Amount.” California’s specific rule is quite strict on this question, and in fact, may be one of the most strict in the entire country. So beware!
A California mechanics lien claim amount is limited to the reasonable value of the work provided by the claimant or the price agreed to by the parties…whichever is less.
A California mechanics lien claim amount is limited to the reasonable value of the work provided by the claimant or the price agreed to by the parties…whichever is less. This limitation leaves no room for ancillary fees like attorney fees, lien costs, interest, late payment penalties and the like. If you include them in your lien claim you may undermine it, and therefore, you should not include it.
Leaving the fees out of your lien claim does not mean you are unable to recover them. To the contrary, if you file a foreclosure action to enforce your mechanics lien claim, the court may award you these extra amounts.
Filing your California mechanics lien claim too late
Unlike most states where the deadline to file a mechanics lien claim is counted from the last date a claimant actually furnished labor or materials to a project, California calculates the deadline from the completion of the entire project. This is very inconvenient, especially for material suppliers who may be a few states away from the job site.
We previously wrote about this aggravating component of the lien law in “California Mechanics Lien: 4 Gray Areas In the Lien Law.”
In short, your mechanics lien claim may be due within 90 days after actual completion of the project, or within 30 days of when a notice of completion is filed. There is no clear-cut way of knowing whether a notice of completion was filed, nor is there any method to determine if completion has been achieved at the project.
Accordingly, it is very common for lien claimants to wait long periods of time before filing these liens and file them late. Don’t do this. Waiting to file your mechanics lien claim can be a big mistake.
Not serving the mechanics lien claim on the property owner – and proving it
The California mechanics lien laws were changed quite substantially in 2012. The mechanics lien document was most affected by a change that now requires the property owner be served with a mechanics lien claim and that proof of the service must be filed along with the lien claim itself.
This has led to two substantial mistakes: (1) Claimants not serving the property owner, or not doing it properly; and (2) Claimants not including the proper proof in their lien claim.
It is clear from the statutes that the property owner must be served by “registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing.” Cal. Civil Code §8146(b).
The first order of business is to serve the property owner by one of these methods, although I highly discourage the use of first-class mail as it is not able to be tracked even if you have a certificate of mailing showing it was sent.
The second order of business is to prove it, which means creating an affidavit attesting that the mailing was completed and having that filed with the recorder along with your lien claim. Make sure your affidavit is notarized.
Filing your own California mechanics lien
If you want to file your own mechanics lien, we’re first in line to provide you with as many free resources as possible to help. Levelset publishes a California Mechanics Lien Law Resource Center, free mechanics lien forms, and this blog contains hundreds of articles about the lien laws in that state.
Nevertheless, it’s important to be wary when filing a mechanics lien on your own. There are just too many traps, and it’s highly likely you will fall into one. Your real question is whether you should hire an attorney or a lien service like Levelset to help you with the claim.
Plus, you’re really not going to save any money doing it yourself. You still have to pay the filing fees, do the property research (which, you should spend money on), hire a courier or make the trip to the county office, etc., etc.
Describing the property incorrectly
California’s mechanics lien law is actually quite liberal when it comes to the description of the property. While most states require a formal legal property description, California merely requires a description of the site “sufficient for identification.”
In some cases, you may be able to get away with a municipal address. However, you should cautiously avoid doing this.
Municipal addresses can be messy and inaccurate, even if the postal service delivers mail to the address. You would be surprised how often an identified address on a building does not match city or state records, or how often it is ambiguously confused with another property on a similar street (i.e. E. First Street, W. First Street, and First Street).
Putting the simple address to the job site on your mechanics lien claim may pass muster, but you’re playing with fire. Use a legal description, or at the very least, get more descriptive about where the property is located.