Legal Question in Construction Law in California
Can I go to the county clerk and pay the amount of a unwarrented mechanics lien to remove it from my title (I need to finance a construction loan) and fight the lien or let it expire? Does this add time to the lien the same as bonding around it. I need something done fast, the contractors attorney (a sub filed the lien) so far has writen letters, but we aren't any closer to resolving this then we were 3 weeks ago.
What would be the fastes way to remove it, short of paying the sub.
3 Answers from Attorneys
No. The clerk will not take your money. Your only two options are: a) to record a release bond and file under the expedited procedures for removal of the lien once it expires, or b) if the lien is already invalid for any reason, file the expedited proceeding to remove the lien now.
If you are trying to get a construction loan, I'd suggest working more closely with the lender as to the nature and seriousness of the lien, and if you don't want to pay the lienor, the lender will probably accept "bonding around" the lien as a good alternative, unless in order to get the bond you have to put up collateral that you were intending to use for the construction loan. I have no information about depositing funds with the county clerk for this purpose, and very much doubt that such a procedure exists. Basically, once a lien is recorded, the fact of its recording stays on the public record forever, even if the lien becomes totally stale after a few months. I suppose a court could order the recorder to physically expunge the lien from the public records with "White Out" or scissors or whatever it would take, but this never happens; all an expungement does is cause the addition of a later item saying "that lien entered six weeks ago is hereby expunged" and anyone studying the property's history will find both the lien and the expungement, or bond, or abstract of judgment, or whatever. Also, it appears to me that bonding doesn't extend the lien unless you fail to serve notice of the bond on the lienor as required by Civil Code section 3144.5.
I should add that recording a release bond will clear the lien immediately for title purposes, which should satisfy any commercial lender. All your lender should care about is that they can get an ALTA Lender's Policy of Title Insurance not showing the lien as an exception from coverage. In other words, all the lender should care about is that their loan will have priority over the lien. Since the bond replaces the lien, and if the lienor actually prevails in enforcing the lien, they get the bond funds, not the house, the lender would be unaffected by the lien. That is all the lender should care about. As Mr. Whipple notes, everything in the public record stays in the public record, but subsequent recording renders much of the old record moot, just as my deed to the person I sold a house to renders the deed to me years ago moot, but doesn't remove it from the record. That is all the lender should care about.
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