I am a materials provider for solar. No direct contract with the homeowner of a single-family residence. Delivered my materials to the house on April 1st, and the installer/direct contractor completed the job at some point thereafter. Preliminary Notice sent to homeowner and the direct contractor (no creditor) within 20 days. Unfortunately, the direct contractor is going out of business - I will not be paid. The homeowner did not file notice of completion. I filed a lien against the property about 40 days after the delivery date. (Homeowner was served and even acknowledged.) Unfortunately, after the homeowner contacted us, just to confirm the lien was not some mistake, we realized within days that the amount of our claim in the lien was accidentally just over 40% higher than it should have been. From what I understand, the homeowner did not know that we overstated our claim until after we sent him the correct lien, so we certainly appear to have caught the mistake on our own. We sent and recorded another lien (for the correct amount this time) five days after the first lien was recorded. The day after that (day 6 after the erroneous lien,) we also sent and recorded a lien release for the original (wrong) lien. (Both liens existed for one calendar day, but only one had merit.) Questions: -If we have to go to court, how bad would the 40% (~$2,000) error make us look to the judge, even if it should look like we caught the mistake on our own? -Or did this type of discrepancy already invalidate our lien, and we shouldn’t even try to take the correct lien to court it the owner doesn’t pay without further action from us? -Does the existence of both liens at any same time make our second (correct) lien invalid? -Assuming that the above questions still make our correct lien look valid, does our 90-day clock to file the lawsuit start from the day the erroneous lien was filed? Or from the day the correct lien was filed? Or from the day that the incorrect lien was released? Thank you.
While intentionally overstating a lien is grounds to invalidate the lien, doing so by mistake is generally excusable provided the issue is timely addressed upon discovery. You did not need to completely release the first lien and record a new one. You could have simply recorded a partial release of lien to adjust to the correct amount. But you approach is okay because you appear to have been well within 90 days of project completion.
I understand that you have release the incorrect lien, so the fact that it exists should not be an issue.
Because you recorded a new lien, you have 90 days from the recording of the new lien to file an action to foreclose if necessary.
In the mean time you should plan on using the lien as leverage to negotiate a resolution with the owner either directly or through an attorney.
Thank you so much for taking the time to answer my question. Something that occurred to me as a result: If I got to (unilaterally) restart the 90-day clock after filing the correct lien, what could stop me from making a mistake like listing a wrong property address, and using that as an excuse on, say, day 70 of the 90, to file a corrected-address lien and release the incorrect-address one? And I could make a mistake in misspelling the homeowner's name in the second lien to, then, file a third one on, say, day 20 in the life of the second lien. Thus, I'd give myself 180 days. But even if I didn't "push" it to 70 days, as in the first correction, doesn't it seem that the clock should really stay started on the date of the original lien? Otherwise, this seems like an interesting loophole, even if it only gives me just a few extra days, like I got from (mistakenly) misstating the claim amount.
And, as it turns out, we screwed up one digit for the property address in the second lien under "commonly referred to as:." But we got the correct APN. We since checked the county recorder website: The second lien shows up under either spouse's name, so I imagine that we can still enforce it, if we have to. But if we should learn that this is also a material error, and wouldn't be able to enforce this lien in court, then we should also file another corrected one before too long.
Unfortunately, this homeowner is, so far, refusing to pay, on the grounds that we only corrected the amount claimed after he happened to mention to the employee who spoke with him by phone on day 4 of the first lien that he is an investigator and would first try to get the direct contractor to pay. He claims that if he hadn't mentioned his profession, even tho he wasn't disputing the amount/arguing with my employee, we wouldn't have "caught" the mistake. But it really was a mistake.
You have 90 days from Project completion to record a lien (absent a notice of completion). So if the lien has errors other than an amount needing correcting, and you have time to do so, it makes sense to release the lien with errors and record the new lien with all correct information. If you are out of time to record a new lien, you may still be able to enforce the existing lien but would want to release any overstated amount and ensure it has been properly served. If you mailed to the wrong address, that would be a problem.
Thank you. No, we got proof of service at the correct address for both liens. Just the street address listed in the second lien itself is off by one digit (but the APN is correct.)
Seems like I may have just, accidentally, found a loophole to unilaterally extend the lien enforcement window, even if only by the 5 days already. :)