A mechanic’s lien is a cloud on a property’s title. When a contractor or other supplier is not paid, they have the legal right to place a lien on the property. The mechanic’s lien is a right that the contractor has, in addition to the right to sue the non-paying party for breach of contract.
A mechanic’s lien would make it extremely difficult to sell a property. The lien must be resolved beforehand. If a transaction was concluded with the lien still on the property, the new owner would not have a full ownership interest. There would be no reason why anyone would want to buy part of a property. Further, Banks would not allow the owner to refinance the mortgage or borrow against a property with a lien and place. A mechanic’s lien appears in public records, and it would show up in a title search.
Any type of home contractor can file a mechanic’s lien. Even a subcontractor who was not paid by the general contractor can file a lien, even though the homeowner had no involvement in the non-payment. Although it seems unfair to the homeowner, California law is intended to encourage contractors to pay subcontractors. The onus is then shifted to the homeowner to sue or pressure the contractor to make full payment. Therefore, homeowners should be very careful about the contractors with which they do business.
Even after the mechanic releases the lien, Property Owners must still ensure that the lien has actually been released through a physical certificate.
Contact a Los Angeles Real Estate Litigation Attorney Today
The law offices of Alan J Carnegie represent property owners and contractors in real estate disputes, including mechanics liens. We work to obtain the most favorable outcomes for our clients. To learn more, call us today at 877.261.4456 or message us online.