I am a subcontractor on a project and funding was canceled due to coronavirus pandemic. My mechanics lien is in place and need to proceed with foreclosure process. How do I proceed?
1 reply
Aug 17, 2020
There are 4 steps that can be taken after you file a mechanics lien, including filing for foreclosure. You can initially send a notice of intent to foreclose. If your phone calls or emails don't initiate payment you can escalate your claim by sending a Notice of Intent to Foreclose. The notice should be sent by certified mail to the property owner, the prime contractor, and any other interested parties. A notice of intent to foreclose is a final warning to all parties on the project, and tells the party that they have one more opportunity to pay or your mechanics lien will be foreclosed upon.
Most mechanics lien claims get paid before a foreclosure action is ever required. However, there are some instances when foreclosing on your lien claim is necessary. To file a foreclosure action, you will need to hire an attorney because it is a lawsuit. Even if your claim value is low, this is not something you can pursue in small claims court alone. In many states, if you are successful in your foreclosure, there is a possibility of recovering attorney fees and court costs.
A final thing to remember is that California has a 90 day deadline to enforce a mechanics lien after recording the claim. The enforcement deadline can be extended if the owner agrees to extend credit, and the owner and claimant both sign the filed Extension of Credit document. If you miss your deadline then you loose all leverage.
Here is an article that you might find helpful pertaining to the foreclosure process: The 4 Steps to Take After Filing a Mechanics Lien