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How can I extend my lien rights in the event customer defaults on agreed upon monthly payments?

CaliforniaLien Deadlines

Hi: I have a customer who states they do not have the money to finish paying on their project and would like to make monthly payments (total $25k). Can I file a lien as well as an extension of it for a year, so that in the event the customer defaults, I still have my lien rights 11 months down the road? I am in California.

2 replies

Sep 25, 2019

This is a challenging situation where you want to do the best for your customer, but at the same time, you want to keep your rights in place to protect yourself against non-payment. The short answer to your question is that - yes - you likely can do something like this in California. You may want to consult with a Calfornia lawyer to get this thing put together, or to make sure it's all done correctly. Hopefully, this answer will help get you started. First, get the California mechanics lien filed The first thing you'll want to do is get your California mechanics lien filed. This is pretty straight-forward, but it's important that you do this right. Next, you'll want to do a "Notice of Credit" to Extend The Lien for 1 Year The next thing is you'll need to file a "Notice of Credit" to extend the lien for up to 1 year. This notice of credit will be signed by the owner. Usually, this is difficult to get (i.e. the owner's signature). But, in your case, this seems possible. In fact, this is very close to the reason why this process even exists. Here is what you need to know about Notices of Credit in California. And here is a Free Notice of Credit form. Good luck.

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Sep 25, 2019

Mr. Wolfe is spot on!

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