What Steps Do I Take When A Breach Of Contract Occurs?
Aug 7 2019 0

How Do You File A Lien In A Construction Payment Dispute?

Suppliers, subcontractors, and contractors all deserve to receive payment in exchange for the work that they do and the materials that they have provided. Far too frequently, however, they are not immediately or fully paid and they find themselves embroiled in a dispute over that missing or inadequate payment. Luckily, California law provides people in the construction trade a legal device known as a mechanic’s lien that they are entitled to use to ensure that they will receive the full and proper payment.

How Do You File A Lien In A Construction Payment Dispute?

Are You Eligible to File a Lien? 

The first thing you need to do is to decide whether or not you are qualified to file a lien in the state of California. This state only acknowledges liens filed by people who are in a direct contract with a contractor, a property owner, a subcontractor, or someone who is a legal agent of those people.

If you are not in a contract with the property owner, you are expected to give a Preliminary Notice to the owner, along with any other required parties, no more than 20 days after you first provide supplies or labor. Any work that is completed before the 20-day time frame will not be protected. There is also distinct wording that this notice has to include in order to qualify you for filing a lien. It is always a good idea to confer with a qualified attorney who is familiar with California laws to make sure that your rights are amply protected.

How to Prepare a Lien

The lien document is known as a Claim of Lien and has to contain extremely precise details and wording. A few elements of a customary mechanic’s lien include distinguishing information about the property owner and exactly who hired you to do the job, a summary of the property and your duties, a demand statement and summary of what you are filing a lien for, additional statutory language, and more. You will greatly benefit from having the help of an experienced attorney when preparing the lien to make certain that it contains all of the essential elements.

How to Deliver and File the Lien

The lien has to be verified and signed and you have to send a copy via certified mail to the owner of the property. The original lien will have to be filed with the county recorder’s office, as will an affidavit that you mailed a copy to the property owner. The lien must be recorded within the following timeframe, whichever is earlier:

  • 60 days from filing a Notice of Completion or Abandonment of the project; or
  • 90 days from actual completion or abandonment of the project

Filing a mechanic’s lien can be a complex process. Fortunately, careful preparation with the guidance of a Los Angeles business attorney from Leiva Law Firm can help make sure that you have followed all of the necessary steps. If you are thinking about filing a lien on behalf of your business, you should employ the legal services of a business attorney right away. To schedule a consultation with one of our reputable Los Angeles area business attorneys, call our offices today at 818-519-4465. Our attorneys speak Spanish and English.


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