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California mechanic’s lien law bestows rights in improved property

Mechanic’s liens protect the right of contractors and subcontractors to be paid for their work that increases property values.

A construction contractor, subcontractor and other similar party is granted a mechanic's lien in property that the contractor has improved through its construction work upon it. The underlying idea is that the property owner who hired out the construction work should not be able to enjoy the resulting improvements on the property without paying the very parties whose labor and service increased the property value.

In California, the state constitution grants mechanic's lien rights to "[m]echanics, persons furnishing materials, artisans, and laborers or every class" who "bestowed labor or furnished material for the value of such labor done and material furnished ..." The constitutional provision then directs the state legislature to enact laws to enforce mechanic's liens.

On a very basic level, when a contractor does not get paid for work done on a construction project, if it has taken care to comply with the laws governing lien creation, it can file suit to force a sale of the property and get the value of its lien from the proceeds. Of course, others may have mechanic's liens on the same property and they may compete for priority of payment with other kinds of liens like deeds of trust, construction loan liens or judgment liens. If the total amount of liens combined exceeds the value of the property, the liens are paid in order of priority, usually determined by the order in which they were publicly recorded.

In reality, California (and other state's) mechanic's liens laws are extremely complicated, requiring strict adherence to required procedures, notices, deadlines, recording, service and so on, in order for the liens to be valid and enforceable.

Any contractor, subcontractor, sub-subcontractor, or material or labor supplier to a construction project should seek the legal advice and representation of an experienced California construction law attorney to protect its mechanic's lien interests. Knowledgeable counsel can see that all required procedures are followed and deadlines met.

A skilled lawyer can also represent a contractor in contract negotiation with the property owner before the project begins. Provisions in the contract regarding mechanic's lien rights, waiver and related bonding must be carefully considered to be sure the contractor is not signing away important rights.

For example, a 2014 California Court of Appeal decision upheld as valid a contract provision signed by a general contractor in which it agreed that its mechanic's lien would be junior to the trust deed of the construction lender and accordingly the eventual enforcement of the lender of its lien extinguished the contractor's lien rights.

San Diego lawyer Bryan R. Snyder of the Law Office of Bryan R. Snyder, APC, represents contractors, subcontractors, suppliers and vendors in mechanic's lien matters, as well as in a variety of other construction law issues.

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