How California’s Changing Lien Law Affects You
As of 7/1/12, the existing California statutes for mechanic’s liens, stop notices, and bond claims will be replaced by updated statutes. It is important to understand these changes, as they could determine whether or not your lien filing is valid.
Preliminary Notices: Under the current laws, the 20-Day Notice must be served by all subontractors and lower tier contractors or suppliers. On July 1st, this will simply be called a “Preliminary Notice.” Subcontractors and lower tier Claimants must serve the notice on the owner and prime contractor, however laborers are not required to serve this notice. The prime contractor is now required to serve the notice on the lender, if any. The Preliminary Notice must be served within 20 days of first furnishing labor or material. If it is served after this point, your lien claim may be limited to 20 days before the notice was served along with everything done after service. Aside from a slightly altered Notice to Owner section on the document, the required job information is identical to the 20-Day Notice.
Terminology: Under the new statutes, some of the terminology has been changed. A Stop Notice is now called a Stop Payment Notice. The term original contractor will become Direct Contractor. Materialman has been replaced with material supplier. Completion now means the following: (1) actual completion of the work of improvement; (2) occupation or use by the owner accompanied by cessation of labor; (3) cessation of labor for a continuous period of 60 days; or (4) recordation of a notice of cessation after cessation of labor for a continuous period of 30 days. “Completion” has not been redefined on public works and a project will not be deemed completed unless accepted as complete by the public entity.
Who Can File: Design professionals will be able to file liens once the changes take effect.
Deadlines: The deadline for service of a Stop Notice is currently 90 days from completion. Under the new laws, completion will be at 60 days of job cessation rather than 30 days.
Mechanic’s Lien Filing: In California, the unfiled lien must be served upon the owner along with a Notice of Mechanic’s Lien before it can be filed with the clerk. Under the new statutes, a mechanic’s lien may not be recorded unless it has been accompanied by a proof of service of the lien and the Notice of Mechanic’s Lien on the property owner.
Rules for Filing an South Dakota Mechanic’s Lien
Who Can File: Anyone supplying labor, work, or materials for a project can file. This includes professional services such as architecture engineering, and surveying. Only work or labor relating to the project that has already been furnished can be claimed by a claimant. Additionally, no written contract is required. An acknowledgement by the owner that the work is being done is all that is required to be eligible to file.
Preliminary Requirements: A “Sworn Account and Notice of Claim” must be served by all subcontractors and lower tier claimants. Serving this document upon the owner will secure your lien rights should need to file.
Lien Filing: The lien document must be filed within 120 days from the last date of work. Additionally, the unfiled lien must first be served on the owner before it is filed. South Dakota is unique in that a lower tier Claimant must serve two separate documents (the unfiled lien and the sworn account and notice of claim) upon the owner before filing.
Action must be taken within 30 days of service of the filed lien, or the document will expire.
Public Liens: South Dakota is one of the few states that makes public liens available. However, the time limit for filing is much more strict than a commercial or residential lien. A public lien must be filed within 20 Days from the last date of work. It is filed with the appropriate officer of the public body overseeing the project.
Knowing how to secure your lien rights with the proper preliminary requirements is an important step to take when trying to properly file a document. Many clerks require that these prenotices be attached to the lien as proof that the proper requirements were met. Knowing the preliminary requirements before going into a new job can give you peace of mind should you need to file a lien in the future.
AFTER you have successfully filed your lien, the owner doesn’t always automatically pay what you say is owed. Alaska law requires that a mechanic’s lien be enforced (or legal proceeding begin) within 6 months after the date the Claim of Lien was recorded.
However, Alaska does allow a lien to be extended for an additional 6 months if an Extension Notice is recorded in the same recording office as the original lien within the original 6 month period.
Once you have received payment or have reached a settlement, Alaska State Statutes do not provide who is to cancel a lien when it is satisfied, or by what time the lien needs to be cancelled. LienItNow.com recommends that the lien claimant discharge the lien when payment has been received.
How to Be Sure You Are Within Your Lien Rights in Oregon
Filing your construction lien in Oregon can be a very straightforward process, provided all of the requirements are met. Oregon requires that everyone entitled to file a lien must be registered in the state. Without this registration, your lien claim may not be valid. Additionally, only work or labor relating to the project that has already been done can be liened. A written contract is not required to file, as long as there exists some form of acknowledgment by the owner that the project is taking place.
Preliminary Notice Requirements: Prime contractor must serve an Information Notice on the owner. This notice makes the the owner aware of all subcontractors working on the project. All lower tier claimants must serve a Notice of Right to Lien on the owner and contractor for residential projects. On private projects, only materialmen must serve the Notice of Right to Lien.
Filing the Lien: The lien must be recorded within 75 days after completion of construction. A copy of a statement of account must be attached for filing. This can be an invoice or an accounting report. This time limit can only be extended if the additional work done is in the contract. Within 20 Days of filing, the lien must be served on the owner via certified mail.
Action must be taken within 120 days after recording or the lien will expire.
The most difficult part of filing a lien is making sure you complete each required step within the correct timeline.
To place a mechanic’s lien in Alaska, if a Notice of Completion is not recorded by the property owner, the Claim of Lien must be recorded no later than 120 days after the completion of the construction contract or the last day it provided materials or labor to the project.
Lien claimants who receive advance notice of a filing of a Notice of Completion by the owner have 15 days thereafter to file an Alaska claim of lien.
If the lien claimant has not given a Notice of Lien Rights (pre-lien), it also has 15 days to file a claim of lien after the recording of the Notice of Completion.
A lien claimant who recorded a Notice of Lien Rights (pre-lien) has 90 days after either the completion of the construction contract or the last day it provided materials or labor to the project.
Once the lien has been recorded, Alaska law does not require that a lien claimant serve the recorded lien on the owner.
Filing Your Mechanic’s Lien in the Lone Star State
In most states, the preliminary notice is an important step for Subcontractors and Suppliers in the lien filing process. Texas is no exception. Luckily, you may have already met these requirements without knowing it.
While Texas does have a specific prelien form, an invoice or request for payment can be considered proper notice. The only other requirement is that these notices must be give to the client every 2 and 1/2 months from the start of the project. It is also always best to send these out via certified mail, as you will be able to recorde the dates that notices went out on the final lien document.
A Texas Mechanic’s Lien for a Subcontractor or lower tier claimant must be filed within by the 15th day of the 3rd month from the ldate on which indebtedness accrues. According to Texas law, debt accrues on the last day of the month in which you performed work. This means that you have 2 and 1/2 months from the last day of the last month in which work was performed. If you performed work on June 4th, your deadline for filing would be September 15th. The 2 and 1/2 month deadline always begins on the last day of the month. This allows for plenty of time to meet any prenotice requirements that may be required.
Should you need to enforce the mechanic’s lien, you must be careful that the information included in the Alaska Mechanic’s Lien is valid and will not void the lien.
Almost every day, I am asked if the cost of filing a lien is allowed to be included in the amount due listed on the mechanic’s lien. Alaska law specifically states that the amount able to be claimed in a lien is“the contract amount”. Anything included in the contract price is allowed to be included in the lien amount, anything not included in the contract price will void the lien if included in the amount.
Alaska Law requires “a legal description sufficient for identification” in order for the lien to be valid. Be sure to include the legal property description that is listed in the county property records.
Last but not least, if you do not have the mechanic’s lien notarized, the clerk will deem it to be invalid.
The Hawaii Lien Filing Process
Filing a Hawaiian mechanic’s lien properly requires very specific timing on the part of the contractor. In addition to timing, the proper paperwork must make its way through the Hawaiian court system before it can be served. It is best to begin the entire process as early as possible in order to avoid delays.
Who Can File: Anyone with an express or implied contract can file, as long as that person or company provided work, services, or materials which were incorporated into the project.
Filing Deadline: While there is no prenotice requirement, the lien ust be filed no later than 45 days after completion. Completion is when the owner or the general contractor completes the publication of a Notice of Completion and an affidavit of the publication. If a valid Notice of Completion is not published and filed within one year after the actual completion or abandonment of the improvement the “date of completion” shall be deemed to be one year after actual completion or abandonment.
Filing Process: Once the document is sent to the Hawaiian courts for filing, a hearing date is decided and is held not less than 3 nor more than 10 days after service of the document. This means that the Claimant or the Claimant’s representative must appear in court within as little as 3 days after the lien is filed. Service of the filed lien and hearing date must be done by process server, and every party must be served including the claimant. If the owner is not available, the notice can be posted on the residence. Notice must also be posted at the jobsite, and all notices must be certified copies. Once everyone is aware of the hearing date, the claim will be determined to be valid or invalid at the hearing. The hearing will also decide how long the lien will attach to the property before it expires.
In Hawaii it is best to begin this process as early as possible due to the short time limit for filing, and the fact that the lien must make its way through the court system within that time limit.
WHEN: A lien claimant may give Notice of Right to Lien (preliminary notice) to the owner or owner’s agent before furnishing labor or material to the project. This notice works to transfer the burden of proof to the owner in a foreclosure action, and entitles the person giving notice to advance notice of the owner’s filing of a Notice of Completion. A Notice of Right to Lien may be filed up to 15 days after the owner records a Notice of Completion, and will work to assure the lien claimant the full 120 days to file his Alaska Mechanic’s Lien.
You have the right to file a mechanic’s lien in Alaska if you belong to one of these categories: a general contractor , a union trust and trustees, materialmen who furnished materials directly installed on the site, equipment supplier who supplied equipment to the site, an architect, a surveyor, an engineer, or a company or individual who performed labor for the improvement of real property.
Be aware that a materialman or subcontractor must have contracted with a subcontractor or higher (not a sub-sub) in order to have the right to place an Alaskan mechanic’s lien.