Monthly Archives: December 2016

Are you protected by the Lien Laws? – part three

 

 

 

So we have covered: Real Property, Work of Improvement, and Eligibility in the first two parts of this series. These are all critical to understanding mechanics liens in almost every state. Now we will dive into the next critical area.

Time

 

Every state has specific requirements with regards to the time allowed to seek protection under the mechanics lien law. One hard fact to embrace from the start is: Forget the concept of holidays, weekends, snow days, closed due to construction, all of these normal and natural periods are completely ignored when it comes to complying with the lien laws.

So, if the lien law allows 20 days from the day you begin to work on the project and you start to work on December 23, 2016 You have until January 11, 2017 to have your notice served. 20 calendar days. Of course you could always have your notice served on day one (December 23, 2016 in this example) but you cannot wait until January 12, 2017 and receive total protection. Now this example is based on California Lien Law and it applies to those who must, by law, serve a preliminary notice in order to secure their rights to claim a mechanics lien. Other states have different time requirements; Florida allows 45 days, Oregon 8 days, some allow -0- ( you must serve notice before you start). Best tool for keeping up with these timelines is the CRM 50 State Guide.

 

 

 

This guide is complementary and can assist you with determining the action required to secure and protect your rights to claim a lien. When you need to seek protection under the lien laws you must respect the scope of the timelines.

Using the above example; 20 days to serve your preliminary notice, then what? If you have been paid, you will need to Release your Right to Claim a Mechanics Lien. If you have not been paid, you MAY serve and record a mechanics lien. This will protect the Lien Rights granted to you by the serving of a preliminary notice. Most states allow 90 days from the day you stopped working on the project. However, our California example allows 90 days from the completion of the project or 30 days from the filing of a “Notice of Completion” providing you are served an advisement which informs you of the Notice of Completion being filed. In either case 30 days, 90 days from completion, or 90 days from last working on the job. These days are HARD Calendar Days. Forget any weekends or other “reasons to delay”. The courts do not care why you filed late. You and everyone else who are eligible and secured their right to claim a lien, are subject to the same timeframe.

Here’s a small tip: Allow at least 50% of the timeframe listed within the state statute to begin your claim of lien process. Example: if the statute allows you 90 days from the completion of the project, then by day 46 begin the process of claiming your lien. Reason; some of the process is left to Public Agencies to facilitate your claim. This could be something as simple as submitting your lien for recordation in the County Recorders Office or having your lien served by a Sheriff. These processes are subject to unforeseen delays. Any of which may cause your lien to be delayed to a point where it is no longer eligible for serving as a valid claim.

Once again, the scope of this article has not included all that should be understood so keep an eye out for: Are you protected by the Lien Laws? – part four “How much can I claim?”