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What is process for filing foreclosure of mechanics lien after expired extension

I have been cooperatively working with the property owner. Mechanics lien filed 6/19/19 in LA County. Thereafter, in trying to resolve case with property owner, we entered into a tolling agreement, wherein we agreed to extend the timeframe to September 30 to file foreclosure complaint. Thereafter, homeowner agreed to pay a settlement of $30K (while the remaining $90K was still disputed due to payment issues with general contractor). We entered into a settlement agreement for just the $30K, and within that document, another tolling agreement to file foreclosure action to December 30, 2019. In trying to reach the homeowner, he was unreachable around the Holidays. I did not file my foreclosure action before 12/30. I want to file it this week, but am concerned that my ability to do so has expired. I have seen articles and codes that seem to say I can still file the foreclosure complaint within 90 days of the expiration of the extension of credit (in my case, a tolling agreement), but no longer than 1 year from end of construction (which was in March, 2019). Our tolling agreements were not recorded with county recorder, just signed by myself and the home owner, stating that both parties agreed to extension of statute, etc. Is my ability to file a complaint for foreclosure of mechanic's lien still going to be valid? Thank you for your time. Glen

2 replies

Jan 30, 2020

The time periods for enforcement of a California mechanics lien are set forth by § 8460. Generally, the deadline to enforce the lien is 90 days form the date on which the lien was filed, but that time period can be extended under certain circumstances. In order to extend the enforcement deadline, the claimant and owner must agree to extend credit, and notice of the fact and terms of the extension of credit must be recorded. This recording must be accomplished "(1) within 90 days after recordation of the claim of lien or (2) more than 90 days after recordation of the claim of lien but before a purchaser or encumbrancer for value and in good faith acquires rights in the property." If the extension of credit is properly recorded, the time to enforce the lien is extended to "within 90 days after the expiration of the credit, but in no case later than one year after completion of the work of improvement." So, in no case may a mechanics lien be enforced later than one year from the completion of the work. Pursuant to a properly filed Notice of Credit, however, the period to enforce a mechanics lien may be extended up to that deadline. In a case where the Notice of Credit is not filed, the "extension" of the foreclosure period does not apply - parties are not able to modify the specific statutory requirements by agreement. However, there is a glimmer of hope for parties who originally failed to properly record a Notice of Credit. California allows a Notice of Credit to be filed "more than 90 days after recordation of the claim of lien but before a purchaser or encumbrancer for value and in good faith acquires rights in the property." If no third-party has acquired rights in the property, it may still be possible for a claimant to record a Notice of Extension of Credit at any point prior to one year from completion of the project as a whole - in order to gain the extended lien enforcement period. (Note, however, that this would still require the property owner's approval and signature).

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Feb 3, 2020

It sounds like you may have an uphill battle to try to enforce your lien given that your "notice of credit" (lien extension) was not recorded: https://www.levelset.com/blog/can-i-extend-a-mechanics-lien-claim-in-california/ You still have your contract right, of course, plus also other possible causes of action. ---CN

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