What is a mechanic’s lien and how does it work?

Before we get to the mechanic’s lien, we have to talk about a preliminary 20-day lien notice. Except for a contractor that has contracted directly with the property owner, this notice must be sent to the property owner to notify him of a subcontractor’s or supplier’s contribution to the property. The notice should be sent within 20 days from the time work began by that contractor to secure all the work performed. If it is filed later, it will only reach back 20 days from the date of the notice. If the document has not been sent (whether or not received), no mechanic’s lien can be enforced.

The mechanic’s lien is a document recorded with the County Recorder and mailed to the property owner. It advises the property owner that a contractor, sub-contractor, or material supplier is asserting a claim against the property because there is an unpaid bill for work performed on the property. This starts the process to create a lien against the property. If properly enforced, the property can be foreclosed upon to pay for the outstanding unpaid balance.

The mechanic’s lien must be recorded within certain time periods, either 30, 60, or 90 days. However, the recording is simply not enough. Within 90 days of recording a mechanic’s lien, a lawsuit must be filed to foreclose the lien. The time limits are critical to protect the lien. If you miss a deadline, even by one day, could result in the loss of a claim worth thousands of dollars.

If You Are the Property Owner

For the property owner, don’t ignore a preliminary 20-day notice. You are being told that someone needs to get paid. Make sure your contractor has paid the subcontractors and suppliers by getting copies of unconditional releases at the time of payment, or issue joint checks to avoid huge financial surprises. If a mechanic’s lien has been recorded against your property or a lawsuit is filed, immediately consult an attorney knowledgeable in mechanic’s lien law such as David H. Ricks & Associates.

Because you could lose your property if you ignore these documents, it is important that you take action immediately.