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You held up your end of the bargain, did the work you contracted for and the customer didn't pay. What do you do now? When a contractor, subcontractor, laborer or supplier is not paid in-part or in-full, for labor, services, equipment or materials provided, he can file suit against the person who failed to pay him. But you have to know what to do, use the right forms at the right time. Other Mechanic's Lien packages for sale only include the Lien form, or only the Lien and Lien Release Forms. A Lien Form won't do anything but waste your time unless you've already delivered the Preliminary 20-Day Notice form (if you didn't contract directly with the owner) and Stop Notice form. California Law provides measures you can use to protect yourself. The Mechanic's Lien FormPack provides forms you will need to take advantage of this protection, including these three essentials: Preliminary 20-Day Notice, Mechanics' Lien or Design Professional’s Lien, Stop Notice. A properly filed and foreclosed Mechanics' Lien gives the claimant (you) a security interest in the property itself. If the Mechanics' Lien claimant prevails at trial, the court will order the sale of the property on which the lien claimant performed work or supplied materials, in order to pay off the lien claimant. A properly served and perfected Stop Notice gives the claimant a lien against undisbursed construction funds in the possession of either the owner or the lender. For private works of improvement, the Mechanics' Lien and Stop Notice gives the claimant a lien against undisbursed construction funds in the possession of either the owner or the lender. For private works of improvement, the Mechanics' Lien and Stop Notice are cumulative remedies which can be simultaneously pursued along with a suit for breach of contract on the underlying debt. Both the Mechanics' Lien and Stop Notice procedures involve three basic steps: (1) Serving a Preliminary 20-Day Notice; (2) Recording the Mechanics' Lien and serving the Stop Notice; and (3) Filing a lawsuit to foreclose the Lien and enforce the Stop Notice. Forms included in the The Mechanic’s Lien FormPack: 1) Read Me First – Information about this FormPack. 2) Mechanic’s Lien (CA) – Document for use by Contractors when filing a lien. Must be recorded in the County Recorder's office. 3) Design Professional’s Lien (CA) – Document for use by Design Professionals when filing a lien. Must be recorded in the County Recorder's office. 4) Preliminary 20-Day Notice (Private Work) (CA) – If you did not contract directly with the owner, this form must be filed within 20 days of commencement or work or supply delivery. This form puts the property owner on notice that someone with whom he may not have a contractual relationship is claiming a right to a lien or stop notice against his property. This is a pre-requisite to the filing of a valid mechanic’s lien, a stop notice and a payment bond claim in most instances. 5) Preliminary 20-Day Notice (Public Work) (CA) – If you did not contract directly with the owner, this form must be filed within 20 days of commencement or work or supply delivery. This form puts the property owner on notice that someone with whom he may not have a contractual relationship is claiming a right to a lien or stop notice against his property. This is a pre-requisite to the filing of a valid mechanic’s lien, a stop notice and a payment bond claim in most instances. 6) Stop Notice – This form, when properly served and perfected, gives the claimant a lien against undisbursed construction funds of either the owner or the lender. Stop Notice covers balances 5-35 days past due, and is sent to the lending institution on a particular project. It notifies them that payment owed to you has now become due, but does not guarantee payment to a Lien claimant. 7) Notice of Cessation – Indicates a continuous stop in work for more than 30 days. Must be recorded in the County Recorder's office. 8) Notice of Completion – Must be signed by the owner/owner’s agent and recorded in the County Recorder's office after work has actually been completed. 9) Notice Of Claim On Bond – Notice Of Claim On Bond must be delivered by Certified Mailed or personal service within fifteen (15) days that a Notice Of Completion is recorded. Send this notice by certified letter to the General Contractor, the public agency responsible for the project, and the bonding company providing the bond. 10) Release of Stop Notice or Notice to Withhold – Release of Stop Notice or Notice to Withhold once payment has been rendered. 11) Conditional Waiver and Release Upon Progress Payment – Conditional release form upon progress payment. 12) Unconditional Waiver and Release Upon Progress Payment – Unconditional release form upon progress payment. 13) Conditional Waiver and Release Upon Final Payment – Conditional release form upon final payment. 14) Unconditional Waiver and Release Upon Final Payment – Unconditional release form upon final payment. 15) Lien Release Information for use with Civil Code §3262 – May be used to assist with filling out Lien Release forms. 16) Legal Release of Claim of Mechanic’s Lien – Legal document to release the lien once the claim has been paid. |
