Mechanic's Liens: What are they and how do they affect you? Part 1

(Taken from the State of Californa Website regarding Mechanics' liens, with some annotations)

The California Constituition Article XIV, Sect. provides "Mechanics, materialmen, artisans, and laborers of every class shall have a lien upon the property upon which they have bestowed labor or furunished materials, for the value of such materials, for the value of such labor done and materials furnished; and the Legislature shall provide by law, for speedy and efficient enforcement of such liens."

How these lien rights are perfected is based on statutes. The California Supreme Court has held that mechanics' lien rights are constitutional.

These rights are provided to:
mechanics
materialmen
contractors
subcontractors
lessors of equipment
artisans
architects
registered engineers
licensed land surveyors
machinists
builders
teamsters
draymen
all persons and laborers performing labor or bestowing skill or other necessary service or furnishing material or leasing equipment to be used or consumed in/or furnishing appliances, teams, or power contributing to a work of improvement.

If you fall within any of the above categories it is in your best interest to understand the system and how you can use it how it affects you.

The above listed trades need no have a direct contract with the owner. They must have a contract with the agent of the owner and every contractor, subcontractor, architect, builder, or other person having charge of a work of improvement is held to be the agent of the owner.

Due to the fact that a material supplier is not the agent of the woner, a material supplier's supplier is not entitled to a statutory lien. Further, in order to have you lien, the work and/or materials, etc. must be incorporated into the structure. That is to say that it has to be installed.

Some basic definitions:

Mechanics' Lien: A lien on property.
Stop Notice: A lien on construction funds.

You may use one or both. It should be noted that in public works, you cannot file a mechanisc' lien and therefore, your only remedy may be a Stop Notice. Sincde the Stop Notice is a lien on funds, it may be preferable to a mechanics' lien in some instances.

You should rememeber that even though you may be one of the people protected by the mechanics' lien laws of the State of California, you are not precluded from other remedies. You can still sue on a contract theory just as any other businessperson or on any other legal theory available. So, if you have for some reason not availed yourself of the mechanics' lien rights, then utililze the rights of any other businessperson. What this means is that you can still enforce your rights under your contracts, and you should.

The mechanisc' lien laws and Stop Notice requirements are relatively complicated and must be adhered to very strictly. It is best to consult with a competant attorney familiar with mechanics' lien laws.