Legal Question in Real Estate Law in California

Re: 3rd Trust Deed, Mechanics Lien, Foreclosure

A mechanic's lienholder must foreclose or the lien goes away. If the lienholder forecloses, the buyer takes title subject to the first, second and third trust deeds (presuming these trust deeds were recorded before construction commenced). If the the new title holder does not pay the 3d trust deed and the 3d trust deed forecloses, then the buyer at the 3d trust deed sale will take the title subject to the 1st and 2d trust deeds. You will owe the mechanic's lienholder the difference between what the market value of the property is and what the total of the 4 leins on the property is (up to the total value of the mechanic's lien).

Re: 3rd Trust Deed, Mechanics Lien, Foreclosure

The lienholder can foreclosure. If the mechanics lien was filed prior to the 3rd trust deed, the 3rd trust deed holder would have to pay the mechanic's lien to protect his interest. However, a mechanic lien may only be valid for 90 days unless a judicial foreclosure occurs. Please contact me if you have any further questions.