What can we do to fix our mechanics lien and prelim if it was issued in the wrong company name?

2 weeks ago

We have one account with 2 companies. When we made our preliminary notice for our job, it was made in the wrong company name. Later on, when we filed the mechanic’s lien, the same wrong company was issued. Should we resend and reissue it our prelim and mechanic lien with the right company name and if so does that affect the lien and validity of the lien? Also, should we cancel the current mechanics lien with the wrong company? Please let us know this is very urgent, thank you.

Senior Legal Associate Levelset
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There’s no guidance in the California Civil Code about how to fix notices or liens that were sent out or filed with incorrect information, and there’s no single playbook on how to try and remedy those issues. So, unfortunately, I won’t be able to give concrete next steps on how to correct those issues.

Generally, the best a claimant can do is to take steps they think might increase the chances of their claim being valid. With that in mind, let’s look at some considerations below.

For advice on what your next step should be, it’d be wise to consult a local California construction attorney. Considering this is a unique situation potentially outside of the parameters of California’s lien statute, they might have more insight into situations like this one.

Will sending a corrective notice fix errors on the original prelim?

If a preliminary notice is sent beyond 20 days after first furnishing labor or materials to the project, then the notice will only preserve the right to lien for the 20 days before it being sent, as well as the work that’s done afterward.

That means sending an updated/corrective preliminary notice late will presumably only be partially effective. And, there’s nothing in the California Civil Code’s preliminary notice provisions which seems to indicate that a notice can be corrected by additional notice later on. So, I’m not sure that sending a corrective notice would be much help.

Minor errors may not be fatal

With all of that being said, § 8102(b) of California’s mechanics lien statute states that minor errors generally won’t invalidate a preliminary notice as long as the notice is sufficient to substantially inform recipients with the required information. Certainly, including the incorrect sender is a pretty serious flaw. But, if the company names are similar, that issue might not be fatal.

So, if the bulk of the notice is correct, or if it’s obvious what the notice was trying to convey, then it’s entirely possible the notice might be considered valid. Ultimately, though, that’d be up to the court and attorneys’ arguments (if things came to that).

What to do if the mechanics lien filing contains incorrect information?

Errors on mechanics liens tend to be more consequential than errors on preliminary notices. If there’s time before the lien deadline, then updating the lien with correct information might be possible by either trying to amend the lien or by filing an updated lien and releasing the flawed document from the record.

There can be risks with filing a lien release, though. It’d be important to ensure the language of the release only released the particular document. Otherwise, it’s possible that filing a release could (arguably) result in the release in all lien rights on the project – thereby blocking the second lien.

Leaving the lien as-is may make sense, too

If the company name on the preliminary notice and mechanics lien don’t line up, then that could create issues as well. And, there may be some credence to the thought that leaving things as-is might be more effective or appropriate.

That’d seem especially true if the two companies swapped were truly the same parent company merely conducting business under separate names. After all, if the work done by both companies really all ties back to the same actual business, then the name might just be semantics.

Importantly: This is a bit of an optimistic take. And, again – it’s absolutely possible that the issues described above will negatively impact mechanics lien rights. Consulting with a local attorney could provide clarity on what options will have the most likelihood of success.

Disclaimer: The information presented here is not legal advice and should not be construed as such. Rather, this content is provided for informational purposes. Do not act on this information as if it is advice. Further, this post does not create any attorney-client relationship. If you do need legal advice, seek the help of a local attorney.
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