Legal Question in Real Estate Law in California

Re: Mechanic's lien

In response to your inquiry, let me offer the following:

I agree with Mr. Genser's take on the situation. Allow me to add another thought or two.

In the event the contractor does record a claim of mechanics lien, which threatens to derail a sale of the property, a surety company can issue a Release of Mechanics Lien Release Bond. Once recorded and served on the claimant, the bond replaces your property as security for the lien claim; you'll be able to deliver title to your buyer unencumbered by the lien. You'll need to pay a premium, and give collateral for the bond, but, depending on the value of the sale, it may be worth it to avoid losing that sale.

Also, if and when the contractor does record a lien claim, numerous other questions will arise, such as:

- whether or not the claimant had a direct contractual relationship with you or was a subcontractor; and

- whether or not the claimant has done everything required to "perfect" the lien.

And, as Mr. Genser said, your counsel can then take aggressive steps to challenge the lien claim.

Also, you can take some steps now to limit the claimants later efforts to perfect the lien. If the contractor has done no work on your property for the least 30 days, you can record a "Notice of Cessation" which states that all labor has ceased on the project. Recording that notice will shorten the period of time in which the claimant can perfect the lien claim. When the notice is of record, a claimant that contracted directly with you must record the lien not later than 60 days after you record your notice. A subcontractor must record its claim of lien not later than 30 days after you record your notice. Please understand that recording your Notice of Cessation will not stop the claimant from recording a claim of mechanics lien after the deadline. But, if the claimant records late, it's always easier to force the claimant to release the lien, or beat the lien in court.

If you'd like, contact me by e-mail for a Notice of Cessation form that you can complete and record. Also, feel free to contact me with other comments or questions.

Best of Luck

Now, the inevitable caveat - The foregoing is provided solely as an accommodation, and may not be construed as specific legal advice based on a comprehensive review of all relevant facts and documents. Further, provision of the foregoing information shall not be construed to create an attorney-client relationship.

Re: Mechanic's lien

Send the contractor a letter. If that doesn't work,

have an attorney send him a letter. If that still

doesn't resolve the issue, don't do anything unless and

until he actually files a mechanics lien, at which

time you hire an attorney to act aggressively and swiftly to get it

removed.