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Are we legally able to place a lien on this for appliances in the building if ownership has changed hands?

CaliforniaLien DeadlinesMechanics Lien

we believe the customer has sold the property.

1 reply

Mar 29, 2018
There are a couple of angles to address here. Namely (1) whether lien rights are available for this type of work, (2) whether the deadline to file has passed, and (3) lien rights when the property has been sold. First, and most importantly, it's important to determine whether the work performed is lienable. In California, mechanics lien rights are reserved for those who have provided authorized labor, service, equipment, or material for a work of improvement or a site improvement. Under § 8022 of the California mechanics lien statute, this includes providing material, supplies, equipment, or appliances. While this is more thorough and inclusive than many other states, it's worth remembering that mechanics liens are generally available for "permanent" improvements to the project property. Of course, nothing lasts forever - but for mechanics lien rights to arise, a certain degree of lastingness should be present. Next, the easy part - deadlines. In California, a claimant has a relatively short timeframe to file a mechanics lien. A lien must be filed before the earlier of either 90 days after completion of the work of improvement, or 60 days after the owner records a Notice of Completion or Cessation. Finally, a change in property ownership will not necessarily affect the right to file a mechanics lien. Assuming notice was properly sent at the start of the project (if required), and assuming there is still time to file a lien, the project property changing hands will generally not bar a claim of lien against the property. Because mechanics liens are a property right, rather than a personal right against the owner of the property, the ability to recover via mechanics lien typically runs with the property - regardless of an ownership change. Granted, this principle can be limited by exceptions - such as a statutory limit on the liability of a purchaser, or when a state is an "unpaid balance" state for lien amounts. However, it appears that neither scenario applies in California. If you'd like to read more, we discuss the idea more in depth in this article. Anyway, if a mechanics lien will be pursued, it may be wise to file sooner than later. While a transfer in ownership may not be fatal to lien rights, it could create more tension and give rise to further dispute - and nobody wants a tooth and nail legal battle. Further, if a sale is in the works and hasn't gone through, the presence of a mechanics lien will throw a serious wrench in the closing process, and a selling owner will have that much more incentive to resolve the dispute quickly. A purchaser will certainly not want to deal with a previously filed mechanics lien, and their lender will almost certainly require that the lien be resolved prior to closing.
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