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Contractors: Beware Of New California Mechanic’s Lien Notice Requirements (Civil Code 3084), Which Become Law Effective January 1, 2010

Effective January 1, 2010, Civil Code Section 3084 is changed to provide that a mechanic’s lien claimant (material supplier, contractor, subcontractor, etc.) must serve, at the time of recording a claim of lien, on the property owner or reputed owner a “NOTICE OF MECHANIC’S LIEN” that informs the owner or reputed owner that its property is subject to a legal action seeking foreclosure and that the action must be filed within 90 days after the date when a mechanic’s lien is recorded. The notice must also state to owner or reputed owner that the foreclosure action may affect its ability to borrow against, refinance, or sell the property. Service of the notice shall be made by registered, certified, or first class mail evidenced by a certificate of mailing. Failure to serve the notice shall cause the mechanic’s lien to be unenforceable.

This amendment may provide another defense for property owners who are subject to mechanic’s lien claims where the subcontractor or material suppliers were unaware of this new statutory requirement.

Here is the new law, with amendments underlined:
3084. (a) "Claim of lien" or “mechanic’s lien” means a written statement, signed and verified by the claimant or by the claimant's agent, containing all of the following: (1) A statement of the claimant's demand after deducting all just credits and offsets. (2) The name of the owner or reputed owner, if known. (3) A general statement of the kind of labor, services, equipment, or materials furnished by the claimant. (4) The name of the person by whom the claimant was employed or to whom the claimant furnished the labor, services, equipment, or materials. (5) A description of the site sufficient for identification. (6) A proof of service affidavit completed and signed by the person serving the Notice of Mechanic’s Lien pursuant to subdivision (c). A “proof of service affidavit” is an affidavit of the person making the service, showing the date, place, and manner of service and facts showing that the service was made in accordance with this section. The affidavit shall show the name and address of the person or persons upon whom a copy of the mechanic’s lien and the Notice of Mechanic’s Lien was served, and , if appropriate, the title or capacity in which he or she was served. (7) The following statement, printed in at least 10-point boldface type. The letters of the last sentence shall be printed in uppercase type, excepting the Internet Web site address of the Contractors’ State License Board, which shall be printed in lowercase type:

NOTICE OF MECHANIC’S LIEN ATTENTION!

Upon the recording of the enclosed MECHANIC’S LIEN with the county recorder’s office of the county where the property is located, your property is subject to the filing of a legal action seeking a court-ordered foreclosure sale of the real property on which the lien has been recorded. That legal action must be filed with the court no later than 90 days after the date the mechanic’s lien is recorded.

The party identified in the mechanic’s lien may have provided labor or materials for improvements to your property and may not have been paid for these items. You are receiving this notice because it is a required step
in filing a mechanic’s lien foreclosure action against your property. The foreclosure action will seek a sale of your property in order to pay for unpaid labor, materials, or improvements provided to your property. This may affect your ability to borrow against, refinance, or sell the property until the mechanic’s lien is released.

BECAUSE THE LIEN AFFECTS YOUR PROPERTY, YOU MAY WISH TO SPEAK WITH YOUR CONTRACTOR IMMEDIATELY, OR CONTACT AN ATTORNEY, OR FOR MORE INFORMATION ON MECHANIC’S LIENS GO TO THE CONTRACTORS’ STATE LICENSE BOARD WEB SITE.

(b) A mechanic’s lien or claim of lien in otherwise proper form, verified and containing the information required by this section shall be accepted by the recorder for recording and shall be deemed duly recorded without acknowledgment.

(c) (1) The mechanic’s lien and the Notice of Mechanic’s Lien described in this section shall be served on the owner or reputed owner. Service shall be made as follows:

(A) For an owner or reputed owner to be notified who resides in or outside this state, by registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing, postage prepaid, addressed to the owner or reputed owner at the owner’s or reputed owner’s residence or place of business address or at the address shown by the building permit on file with the authority issuing a building permit for the work, or as otherwise provided
in subdivision (j) of Section 3097.

(B) If the owner or reputed owner cannot be served by this method, then the notice may be given by registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing, postage prepaid, addressed to the construction lender or to the original contractor.

(2) Service by registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing, postage prepaid, is complete at the time of the deposit of that first-class certified or registered mail.

(d) Failure to serve the mechanic’s lien, including the Notice of Mechanic’s Lien, as prescribed by this section shall cause the mechanic’s lien to be unenforceable as a matter of law.

David S. Roberson, Esq. is an associate at the law firm of Rossi, Hamerslough, Reischl & Chuck, 1960 The Alameda, Suite 200, San Jose, CA 95126, 408-261-4252.
 
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