Legal Question in Construction Law in California

Re: Is a mechanic's lien needed/desirable when contractor finances for client?

Either would be a terribly improper use of the mechanics lien remedy.

A mechanics lien may only be recorded when labor and/or materials have been provided to the property, not before; and it certainly cannot be used as a securitization vehicle.

Moreover, the lien itself is only good for 90 days, during which time foreclosure proceedings must be instituted. Otherwise, the lien goes stale, and you must remove it.

From a practical standpoint, don't finance your clients unless you can afford it. You are better off getting the money in full. Your client can finance the job using someone else's money, not yours.

Good luck.

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Re: Is a mechanic's lien needed/desirable when contractor finances for client?

A mechanic's lien will not help you and it will also expire after 90 days unless you file a lien foreclosure lawsuit. Your customer really should finance their project elsewhere.

If you still want to take on this project and still provide financing, you should at least have the promissory note secured by a deed of trust. Contact a local attorney for further assistance.