A Homeowner’s Guide to Preventing Mechanic’s Liens
site admin posted in Construction Law on November 15th, 2005
Preventing liens
Before you pay your prime contractor, deal with the possibility of a lien. The first step is to keep track of Preliminary 20 Day Notices and make sure you are aware of who your potential lien claimants are.
There are a few specific methods you can use to make sure potential lien claimants have been paid:
JOINT CHECKS
Joint checks are the simplest method of lien prevention. When the contractor presents a bill for materials or labor, compare it to the schedule of payments in your contract and the Preliminary 20-Day Notices you’ve received. Make sure that work was provided as described and then make out the check to both the contractor and the supplier, or the contractor and the subcontractor. Both parties will have to endorse the check, which will ensure that the subcontractors and suppliers get paid.
LIEN RELEASES
The release system is designed to allow property owners to track when potential lien claimants have been paid.
Here’s how the lien release system works:
Before you make a payment, you should first get a signed conditional release from the possible lien claimants.
You or your contractor can download a copy of this release from CSLB’s Web site at www.cslb.ca.gov. The prime contractor is required to get this release for you from the potential lien claimants, if you ask for it.
After you receive the conditional releases, make the appropriate payment for the work that was done.
After you pay, the contractor should get you an unconditional release signed by each of the claimants paid for the portion of the work being released. Make sure that the actual claimant signs the unconditional release.
By law, you may withhold the next payment until you get the unconditional releases for the previous payment.
NOTICE OF COMPLETION
You can reduce the amount of time a contractor, subcontractor or supplier has to record a claim by filing a Notice of Completion with the County Recorder’s office after work is completed.
This notice reduces the amount of time a contractor has to record a mechanic’s lien from 90 to 60 days, and reduces the time a subcontractor or materials supplier has to record a mechanic’s lien from 90 days to 30 days.