When you work as a contractor, whether you act individually or work as a part of an entity, you expect to get paid in terms written in the contract. But what if your client fails to fulfill their obligations and pay in time? Such situations often occur in the construction industry when people or enterprises order works tied to building a new house or repairing an existing one. If you have done your job, have not received the money, and phone calls and threatening letters do not work anymore, you have to take serious actions, and filing the Mechanics Lien form is one of them.
This form is a legal tool for contractors and workers that participate in the construction of buildings or various repairs. Building and repairing can be quite expensive, and in many cases, a client may run out of money. It becomes impossible for them to pay on time, but you also expect to receive a certain sum within a specific period, so the document can help you get a successful result.
After you as a claimer complete the form and submit it, the property owner, who is also your obligor, has their actions regarding the property restricted. For one, they cannot sell the property to a stranger anymore until the debt is settled. Moreover, if they do not pay at all, they can be forced to sell the property and compensate for the debt.
Another case when individuals or companies file such forms is when they are not direct contractors but subcontractors. Even if a direct contractor has not paid other companies that have participated in the project, the real estate owner (or customer) is still liable and has to pay again by law.
The structure of such records is simple, and each document indicates:
After all, if everything goes right, and the sum to pay is covered by the customer, the claimer will sign one of the lien release forms applicable to the case, and the conflict will be finally settled.
The Mechanics Lien is regulated by different laws in all American states. Moreover, the form’s name varies: in some parts of the United States, it is called “construction lien,” and sometimes you may see more specific records like “material men’s lien,” “artisan’s lien,” and so on.
In California, the form and relevant norms are added to the Civil Code, starting from Section 8000.
Section 8400 states who can submit such claims in California. Among the possible claimers are direct and sub-contractors, designers, those who provide materials or rent equipment, and laborers.
Before sending a mechanics lien, a contractor must deliver a preliminary notice to a customer, as said in Section 8410 of the Civil Code. It can be sent in a period of 20 days since the work has begun. Some categories of workers can skip this action; however, most of the contractors, especially those who supplied a client with materials, should send the note.
The law offers terms in which contractors may send their claims. Section 8412 regulates the terms for direct contractors: they can file the record within three months after the work is done or two months after the owner notifies about either finishing or halting the works.
Indirect contractors have the same three months after they have completed the work and one month in case of the owner’s notification about completion or halting (Section 8414).
As we have said, the form in California differs from such forms in other American states. The template is brief and contains three pages in total; you have to fill out two of them. See the required steps below.
Before you start, we recommend getting the California Mechanics Lien template with our form-building software. Downloading any legal form template has never been easier.
On the left-hand side at the top of the template, insert your name. Leave the right-hand side field blank because the recorder’s office’s personnel will use it for its notes.
Below your name, insert your name and address. After your form is recorded, it will be sent to the address you indicate in this field, so you have its copy.
After you have filled out the sections on the top, proceed to the claim itself. Add your name in the beginning.
You should specify where the property you worked at is located. Write its address, including city and county.
You have to write the sum in US dollars, including the interest rate, for the work you have done or the materials you have brought. Subtract the paid amount from the total amount and include the numbers here. Insert the date when you started to expect the money.
Specify why the defendant owes you by listing what they have not paid for: people’s work, materials, rented equipment, and so on.
Indicate the name of a person, employer, or company that asked you to render services or supply goods and materials. Below, insert the defendant’s name again and their address.
Then, you, as a claimant, have to insert your own address.
On the left, insert the date when you create the document. On the right, write your name and sign the paper. If you have an agent, let them sign the form for you. Add the signatory’s name below.
If you do not have an agent who represents you in this case, skip this step and proceed to the next page.
If you have an agent, give them the form so they can sign it and prove that they are your agent. Besides the signature, your agent should add their name and the current date.
The form’s second page is the notice every signatory should read before proceeding. Read and accept it. If something is unclear, consult your agent or lawyer to avoid problems in the future.
The third page is a mandatory Proof of Service add-on to your Mechanics Lien form. This paper proves that you have delivered the documents to a person or entity that owes you.
Firstly, choose who you are sending the form to the property’s owner or the contractor. Then, write your name, the defendant’s name, the title of a person who has received the document (if needed), address, date, city, and county. Then, sign the document below the provided data.
Initially, you as a claimer should ensure that you have not skipped the last day when you can submit your claim (see the “Laws” section of this article). You also should double-check your documents (with a lawyer, preferably) so they are properly made and ready to be delivered. If something is incorrect, you will face a delay, and your chance to not file the form in time will increase.
When your papers are ready, you should submit them to the county recorder’s office. It is important to mention that you have to pick the county where the property you worked on is registered. The County Clerk-Recorder official website will advise on the offices’ locations in the state of California.
You must be ready to cover various fees required for your application. The amount varies: if you sum the fees, you will get around 100 US dollars or more, depending on your case.
If you still face any doubts, you may read about the filing process in Section 8416 of the Civil Code of California.
So, what if the obligor ignores the procedure and is not willing to pay? Then, you should go to court and start a case there: it is nothing different from any other lawsuit. You will then be told what legal forms and notices you have to create and deliver to the defendant. Then, the hearing will be scheduled, and the judge will make their decision.