We have a lien filed on our property of which the filer requested arbitration. Does this satisfy the requirement of enforcing the lien within the 90 days?
Nov 7, 2018
California requires that an action to enforce a mechanics lien be initiated within 90 days from the date the lien was recorded. The action to enforce is a foreclosure action in court, and once the foreclosure suit has been filed, a notice of the pendency of the action must also be filed with the county recorder for the county in which the property is located.
There are, however, a couple ways that a lien claimant may be able to arbitrate without running afoul of the enforcement deadline. First, California allows for a mechanics lien to be extended through a document called a notice of credit. If the claimant and property owner agree to extend the lien, it may be possible for an arbitration to take place prior to the enforcement deadline.
Additionally, if the parties have an arbitration clause in a contract that the lien claimant wants to preserve, there is a mechanism available to allow the claimant to avoid waiving the right to compel arbitration. To do so, the party enforcing their lien must abide by Section 1281.5 of the California Code Code of Civil Procedure. If a claimant does either of the following, they can preserve their right to compel arbitration:
“(1) Includes an allegation in the complaint that the claimant does not intend to waive any right of arbitration, and intends to move the court, within 30 days after service of the summons and complaint, for an order to stay further proceedings in the action.
(2) At the same time that the complaint is filed, the claimant files an application that the action be stayed pending the arbitration of any issue, question, or dispute that is claimed to be arbitrable under the agreement and that is relevant to the action to enforce the claim of lien.”
Absent something like the above, however, initiating an arbitration proceeding is not an action to enforce the lien required by California statute.