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Mechanics lien and bonding off

CaliforniaBonding Off LienMechanics Lien

Had a frivolous mechanics lien filed against me. Not only did sub file, mail lien and all other notices to wrong suite address, but I'd claiming $48k of COs. We continue to asked for signed, written, emailed, or texted documentation of a change order existing, let alone being approved. What should happen following bonding around this lien?

2 replies

Feb 19, 2019
I'm sorry to hear that. First, it's worth looking at what issues may or may not invalidate a mechanics lien filing and leave that lien enforceable. Then, let's look at the process of bonding around a California lien (and what might be expected after doing so). First, regarding lien claims generally, when there's a debt that is owed serving as a valid basis for a lien filing, issues with the details of such a filing may or may not lead to a lien being unenforceable. But, typically, courts will err on the side of the lien claimant considering the whole basis for mechanics lien laws is to protect those who perform work and go unpaid. But, at the same time, with great power comes great responsibility - procedural rules for mechanics liens are taken very seriously, and where liens are invalid or exaggerated, courts don't always hesitate to strike them down as invalid and unenforceable. With that backdrop in mind, let's look at California's rules surrounding lien laws. Regarding the sending of notices, the California Civil Code has a little built in leniency. For one, under § 8208, a direct contractor is required to provide the party looking to give preliminary notice the name and address of the owner. So, where a claimant has sought the information of the property owner from the direct contractor, and where that direct contractor has failed to give that information or has given incorrect information, there's a chance a court might provide a little leniency for a claimant on that front. Further, under § 8102, preliminary notice must include the name and address of the owner or reputed owner - but only to the extent known to the person giving the notice. So again - having the correct address for the owner is somewhat fungible for that requirement as well. Of course, in order for a lien claim to be valid and enforceable, it must be served upon the owner of the property. But again, if the failure to obtain the correct information for this purpose stems from the receipt of faulty information or a failure of a required party to provide that information, it's possible that the failure to send notice to the right address might not be fatal. Further, it's worth noting that when the requisite notices have actually made their way into the hands of the party who was required to receive them, mailing the notice to the incorrect address might be immaterial. After all - the whole point is that the correct party is put on notice of the work and of the lien, so if notice was made within the specified deadlines, the notice, even if somehow flawed, could give rise to a valid lien claim. Now, where a claimant has clearly exaggerated their claim and has no valid basis for the amount of their claim exceeding what is presumed to be due, then that claim very well may be deemed invalid on that basis alone. As hinted at above, change orders not properly executed might not give rise to lien rights if the work isn't authorized, but change orders that never even occurred should certainly not serve as the basis for a lien claim. As for bonding off a California lien, let's look to § 8424 of the California Civil Code. Under that section, a property owner, their contractor, or a subcontractor can file a bond for the release of the filed lien. When such a bond is obtained, it must be recorded - much like the lien claim was. Recording the bond isn't the end, though. The party recording the bond must also provide notice to the lien claimant pursuant to Chapter 2 (commencing with Section 8100) of Title 1 of the California lien statute - and a copy of the bond must be included with that notice. Once the bond has been properly recorded and notice has been sent, the claimant will have 6 months to file an action (lawsuit) against the bond for recovery - similarly to enforcing a filed mechanics lien. Of course, at any point during this process, an owner can challenge the validity of the filed lien claim and/or could negotiate with the lien claimant for the release of their lien. When it can be shown that the lien claim is quite obviously flawed and unenforceable, an owner could potentially even negotiate for the release of the lien in exchange for foregoing damages against a lien claimant. In any event, though, before deciding to bond around a lien or to challenge a filed lien, it would likely be wise to consult a local construction attorney. They'll be able to review the circumstances and any documentation then advise on how best to move forward. Considering how expensive fighting or bonding around a lien claim can be, utilizing the services of an attorney might be a worthwhile expense to avoid further costs. For more info on California's lien and notice rules (and for a look at the California lien statute), this resource should be valuable: California Lien & Notice FAQs.
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May 26, 2020
A mechanic’s lien expires after 90 days if you don’t file a lawsuit to foreclose the lien. I’m not sure if you did this or not. If you did, then you or your attorney should have filed and recorded a Notice of Lis Pendens form which would include you or your attorney’s address for notification purposes.
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