California never was a jurisdiction that construed mechanics lien claims very strictly, but the laws that took effect on July 1st appear to legislatively require courts to uphold mechanics lien claims whenever possible.
In the past few months, we’ve published a few articles about how important it is to mechanics lien claimants whether courts will examine claims liberally or strictly. While some states are pure strict jurisdictions states, it seems that the national trend is leaning towards more liberal construction, with courts in Washington and Pennsylvania recently overturning years of precedent the respective supreme courts considered wrongly applying strict construction to mechanics lien claims.
California actually appears to go a step further, not only suggesting that courts must liberally construe claims, but enumerating a specific and limited list of things that can invalidate a mechanics lien. §8422 provides:
§ 8422. (a) Except as provided in subdivision (b), erroneous information contained in a claim of lien relating to the claimant’s demand, credits and offsets deducted, the work provided, or the description of the site, does not invalidate the claim of lien. (b) Erroneous information contained in a claim of lien relating to the claimant’s demand, credits and offsets deducted, or the work provided, invalidates the claim of lien if the court determines either of the following: (1) The claim of lien was made with intent to slander title or defraud. (2) An innocent third party, without notice, actual or constructive, became the bona fide owner of the property after recordation of the claim of lien, and the claim of lien was so deficient that it did not put the party on further inquiry in any manner.
In order to have erroneous information invalidate a California mechanics lien, the challenging party will be required to demonstrate bad faith or some extraordinary circumstance prejudicing a third party.
This will be difficult for any challenger to do. The new mechanics lien laws do give lien challengers more reward if they successfully remove a mechanics lien since §8488 lifts the $2,000 attorney fees limit and allows them to recover reasonable attorneys fees incurred in challenging the lien, but this comes at the expense of §8422, which makes it more difficult to challenge a lien.