Changes to California Mechanics’ Lien Laws

POSTED ON 09/05/2011, FILED IN Recent Developments

On July 1, 2012, SB 189 will go into effect, which implements significant changes to the California mechanics’ lien statutes. Among other things, SB 189 renumbers and rearranges all of the California Civil Code provisions governing mechanics’ liens. Since many of these sections are often referenced in construction contracts/subcontracts, any contracts entered into after July 1, 2012 will need to be reviewed and revised to ensure that they reference the correct provisions.

This change represents the second major change to the California mechanics’ lien statutes in the last 18 months. On January 1, 2011, certain amendments to the statutory requirements governing mechanics’ liens became effective. The purpose of the amendments was to provide better notification to the owner of the property on which the work of improvement is being/was constructed. The changes are important because, if a lien claimant fails to meet the new requirements, the lien will likely be deemed unenforceable. The changes are summarized as follows:

The lien must now include certain statutorily required language which is intended to explain more fully to the property owner the purpose of the lien and the steps that might be taken by the owner to resolve the problem which resulted in the lien being recorded;
The statute requires the lien be served upon the property owner by registered, certified or first-class mail;
The statute requires that the lien contain a proof of service affidavit completed by the person who served the lien; and
The statute provides that the failure to serve the lien in compliance with the statute renders the lien unenforceable as a matter of law.

Besides the foregoing, the provisions regarding the recordation of a lis pendens in conjunction with a lawsuit to foreclose on a mechanic’s lien also changed. The statutory requirements regarding service of a 20-day preliminary notice and deadlines for recording the lien and commencing an action to foreclose such lien were not changed.

If you want more information or desire advice as to how these changes may affect you, please contact us.