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Escrow company sent paperwork to release my lien

I recently received paperwork from an escrow company asking me to release a lien that was placed on a mobile home. They sent a "Conditional Lien Release"; "Lien Satisfied"; "Power of Attorney". At time lien was placed, in 2018, State office told me in order for lien to be released I would need to be paid first, then I would sign off on the lien. This paperwork is asking that I sign off now, prior to close of escrow. I don't wish to stall sale, but I also want to ensure satisfaction of my lien. How do I ensure satisfaction and not give up my rights regarding the lien and risk not being paid? Thank you.

1 reply

Aug 21, 2020

First, it's worth noting that a CA conditional mechanics lien waiver will only be effective once payment is made. Generally, conditional waivers aren't enforceable until payment has been received by the claimant. But, once the claimant is paid, the conditional waiver becomes automatically fully enforceable. More on that here: Final & Conditional: Guide to California’s Lien Waiver & Release. Regarding the other documents - it's not a good idea to sign a document stating that the lien has been satisfied until payment is in hand. If you have arranged for escrow with the other party, then releasing the lien in order to trigger the release of funds might be in order. But, if you haven't agreed to the use of escrow but have simply received this documentation out of the blue, it's completely natural (and probably wise) to be hesitant. It'd probably be useful to have a CA construction lawyer review the relevant documentation - they'll be able to get an eye on the documents and communicate with the escrow company then advise on how to proceed. If that sounds like a good idea, you can search for the right lawyer here: Top California Construction Lawyers. As a final note, keep in mind that mechanics lien claimants will have the most leverage when there's a prospective sale. So, if the property owner is worried about the ability to sell, they may be willing to pay the lien to make sure it goes away. Of course, it's also worth keeping in mind that CA mechanics liens have a short shelf life - and if too much time passes, the lien might not be enforceable (and the leverage might not be all that strong).

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