Effective January 1, 2011, California contractors, suppliers and project owners will be required to take additional steps in order to make and enforce a mechanics’ lien claim. As of the New Year, all claimants must comply with the following new and additional requirement for a valid and enforceable mechanic's lien:
1. The mechanics lien form will change, and require the service of a mandatory "Notice of Mechanic's Lien (from enclosed) by certified mail, return receipt requested.
2. At the time of recording the mechanic's lien, the lien claimant will be required to also serve a copy of the mechanic's lien and a formal Notice of Mechanic's Lien on the owner(s) fo the property by certified mail, return receipt requested, so that the owner(s) can take action to free their property of the lien. If the lien and Notice of Mechanic's Lien are not served on the owner(s) by certified mail, return receipt requested, the lien may be unenforceable.
3. With twenty (20) days of filing a lawsuit to foreclose a mechanic's lien, the lien claimant will be required to record a Notice of Pending Action ("Lis Pendens") which until now has been optional.
4. The recording of a mechanic's lien will not prevent a property owner form selling and refinancing its property until a lawsuit has been filed to foreclose on the mechanic's lien and the Notice of Pending Actions is recorded.
These changes to the mechanic's lien requirements, effective January 1, 2011, will make the recording and enforcement of mechanic's liens more complicated and likely more expensive.
For more information please contact your legal representative.