Legal Question in Construction Law in California

how to extend a mechanics lien in california

Terrna Resorts in Palos Verdes , (loews devepment co) Corus Bankshares has gone under and the FDIC has stepped in, and allowed them to request an emergency draw primarily to pay vendors, including us, but he doesn�t know how long before they get this draw, i.e. 30 days, 60 days, 90 days, etc�.

Capital Group has purchased some of the assets from Corus Bank including the Terranea resort & spa and with that it�s liabilities, so this may be another avenue to pay some of that debt. In the meantime, our lien expires the 3rd week of November, what is the next step?? we probably need to start prepping the paperwork to extend that over the next couple of weeks

someone please advise. thank you -


Asked on 10/09/09, 11:33 am

1 Answer from Attorneys
Thomas W. Newton Tims & Newton

If the actual owner of the property will agree, an Extension of Credit will extend the 90-day period in which you must file a law suit to foreclose the lien. The Extension of Credit document is fairly straight-forward, but must be completed and recorded before the 90-day statute runs. (Cal. Civil Code Sec 3144) You'll want to be careful to get the correct entity to sign. A litigation guaranty policy from a title insurance company would be a good idea.

If the owner is unwilling to agree to the extension of credit, you'll need to file your lawsuit within 90 days after you recorded your claims of lien.

Depending of the timing of things on the job, you might be able to record a second claim of lien even if the first one goes stale. However, recent legislation has changed some definitions in the Mechanic's Lien Law, and raises questions about the possibility of recording a second claim of lien after the first one has gone stale.

Let me know if you need additional information.

Best,

Tom Newton

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Answered on 10/09/09, 12:16 pm


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