What Is A Mechanics Lien?

If you’re unpaid for work or materials provided to a construction job in California, then filing a mechanics lien may be exactly the help you need. This FAQ provides a start-to-finish explanation on California mechanics liens.

A powerful tool to help construction businesses get paid for the work they do, mechanics liens are used by nearly everyone involved in construction projects in California and provide strong lien rights to protect payment. These rights are written into California’s state constitution.

Successfully filing a California mechanics lien can require you take some sophisticated steps. You need to comply with notice requirements, prepare and format documents according with great care, meet certain deadlines, and record with the proper office.

There are plenty of opportunities to make a mistake. Even a minor mistake can invalidate your lien. Keep reading to learn the frequently asked questions and review our answers, so you can avoid trouble when it comes!

Is a written contract required to file a mechanics lien in California?

Generally, a written contract isn’t required in California to be able to file a mechanics lien. The only exception is a design professional who must have a written contract with the property owner

Can an unlicensed contractor file a California mechanics lien?

No. If the work performed requires a license in California, not only will the contractor be unable to file a mechanics lien, but they will also have no legal right to recover payment under the contract. The California State Licensing Board (CSLB) sets the licensing rules and requirements for contractors in the state. For more information, see: How to Get a California Contractor’s License in 6 Steps.

Learn more: Can Unlicensed Contractors File Mechanics Liens?

When is the deadline to file a California mechanics lien?

The deadline to file a lien against the property in California is different depending on the claimant’s role and whether a “Notice of Completion or Cessation” is filed on the job or not.

For direct contractors (those who contracted directly with the property owner, like general contractors), the Claim of Lien must be filed at the earlier of:

• 90 days after completion of the work of improvement; or,

• 60 days after the owner records a Notice of Completion or Cessation.

For all claimants hired by someone other than the owner, the Claim of Lien must be filed at the earlier of:

• 90 days after completion of the work of improvement; or,

• 30 days after the owner records a Notice of Completion or Cessation.

Note: Sub-tier claimants (like subcontractors, sub-subs, suppliers, equipment rental companies, etc.) can’t file a mechanics lien until after they have “ceased” their work.

Who can file a California mechanics lien?

In California, the following parties are entitled to mechanics lien rights:
(a) Direct contractors
(b) Subcontractors
(c) Material suppliers
(d) Equipment lessors
(e) Laborers
(f) Design professionals

Note: Design professionals, such as architects and engineers, only have lien rights under limited circumstances—such as having a written contract directly with the property owner.

Can attorney fees, collection costs, or other amounts be included in the lien amount?

No. In California, the mechanics lien amount is limited to the reasonable value of the work provided by the claimant, or the price agreed to by the claimant and the person who contracted for the work (less payments already received).

However, if you foreclose on the lien, the court may award the prevailing party the money paid for recording the lien and attorney’s fees as costs. In a 2014 court case, the court awarded prejudgment interest of 7% to the lien claimant (the rate set by California Constitution Article XV Section 1).

Do I need to send notice that the mechanics lien was recorded in California?

Yes. A copy of the Claim of Mechanics Lien (including the required Notice of Mechanics Lien wording) must be served on the owner or reputed owner of the property. Service may be accomplished by sending the lien by registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing, postage prepaid, addressed to the owner or reputed owner at their residence, place of business, or the address shown on the building permit.

Service is complete at the time of mailing. Failure to comply with these service requirements will cause the lien to be unenforceable as a matter of law.

What information should be included in a California mechanics lien?

A California Claim of Lien is governed by Cal. Civ. Code §8416(a), and must contain all of the following:

• Lien amount, after deducting all just credits and offsets

• Owner or reputed owner’s name

• General statement of the kind of work furnished

• Hiring party’s name

• Property description

• Claimant’s name & address

• Proof of service affidavit

• Statutory notice language in 10pt, boldface type

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Does a California mechanics lien need to include a legal property description?

To be valid, a mechanics lien in California must include a description of the site sufficient for identification. However, it’s strongly recommended to include a legal property description to ensure that you meet the “sufficiency” requirement.

Does a California lien have priority over pre-existing mortgages or construction loans?

No. A California mechanics lien only has priority over liens that attached to the real property after the commencement of the work of improvement, or were unrecorded at the commencement of the work and of which the claimant had no notice.

A mortgage or deed of trust that would otherwise be subordinate to a mechanics lien may gain priority if a valid payment bond is recorded referring to that mortgage or deed of trust, and the bond is in an amount not less than 75% of the principal amount of the mortgage or deed of trust.