Legal Question in Construction Law in California

Re: No day in Court No 20 Preliminary Notice Do I have toPay

First, he won't get paid through escrow unless you approve the payment. The problem, of course, is that escrow usually won't close with a lien on title. If the title company is willing to be creative, they can work around the lien, but this is something they don't like to do. And, in the case of a lien,the buyer doesn't want to have to deal with a potential lawsuit. There are ways to protect the buyer, but, again, it's not ideal.

The easiest way to deal with this is to purchase a mechanics lien release bond. That will free up your property and the guy who liened can only go after the release bond. He only has a certain number of days to actually foreclose (file a lawsuit) and my experience is that 75% or more of the guys who record a lien never foreclose on that lien.

There is also a fairly quick procedure whereby you can have the lien removed if you can clearly show that it is bogus. You can get into court pretty quickly on these, especially if you can show the court on an order to shorten time that the lien is almost certainly bogus and it will have the effect of preventing the close of escrow. Then again, a savvy judge will know about the release bonds and just tell you to go get a release bond pending the hearing. By the way, the statute allows up to $1000 in attorney's fees if you prevail in having the lien removed. An experienced construction law attorney can do these without much effort, but it's getting hard to do it for under $1000. Few experienced construction law attorneys charge less than $200/hour.

You haven't provided enough facts to determine whether the lien is legitimate. Not everyone has to provide a prelien. Don't go too hard on the recorder's office. It isn't their job to check out whether a mechanics lien is legitimate. If it meets with the proper recording requirements, they have to record it. And, as funky as it may sound, the courts have said that the recording of a mechanics lien is nearly absolutely privileged. So, it's very hard to sue and prevail for malicious prosecution against a guy who has recorded a mechanics lien on a property. (Filing a foreclosure action on the lien, however, is a different story.)

Bottom line if you want that lien off title now: Go get yourself a mechanics lien release bond.

Re: No day in Court No 20 Preliminary Notice Do I have toPay

Let me add my two cents worth to Mr. Redenbacher's very comprehensive reply. There are several crucial bits of information missing. How long ago was the lien recorded? Under the code, the lien claimant has 90 days from the date he/she records the lien to file suit to foreclose that lien. If they fail to file suit, the lien is "stale" i.e., no longer binds the property. But, because it still appears on the recorder's books it is still a cloud on title.

The procedure Mr. Redenbacher discussed for getting the lien released is specifically designed for such a situation - releasing a stale lien when the claimant either cannot or will not voluntarily release the lien. The procedure is a petition for decree releasing real property from lien, and is set forth in Cal. Civil Code Sec 3154. Often, sending a demand letter telling the claimant that the petition will be filed and that attorney's fees can be assessed gets results. I've never had one of these actually proceed all the way to hearing.

But, if you believe the lien is bogus for some reason other than failure to file a foreclosure suit on time, then the 3154 petition will not work for you. In that case the mechanics lien release bond is the way to go. Once issued, it becomes substitute security for the lien claim, and the cloud on title to the property goes away.

You need to know though, that the surety issuing the bond will require you to sign an indemnity agreement, requiring you to make good any loss they incur as a result of issuing the bond. Also, expect the surety to require a lot of collateral. Sureties hate to write Mechanics Lien Release Bonds and do everything in their power to completely insulate themselves from any loss whatsoever. As a result some owners find it more economically feasible to negotiate a settlement, rather than having collateral tied up for a lengthy period.

There are other questions that need answered to fully evaluate your position, but the main question is why do you claim the lien is invalid?

Best of luck with this. Please feel free to contact me to discuss this further - I'd be interested to know the basis for believing the lien to be bogus.

Now the inevitable caveat:

The foregoing information is provided as an accommodation only, and does not constitute specific legal advice or a biding legal opinion based on a comprehensive review of all relevant facts, nor can provision of such information be construed as creating an attorney-client relationship.

Re: No day in Court No 20 Preliminary Notice Do I have toPay

I am a former construction worker that is now a california attorney. I'm currently swamped with an attempted murder case that I'm defending. However, I have some good friends at a firm that deals almost exclusively in construction law. If you'd like, I can have Kevin give you a call. Email me your phone number if you're interested.

Take care and good luck,

Ben