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Judicial Advocacy ASAC Legal Forms:
An Overview of
Mechanic Liens and Stop Notice Remedies A properly filed and foreclosed Mechanic’s Lien gives the claimant a security interest in the property itself. If the Mechanic’s 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 Mechanic’s Lien and Stop Notice gives
the claimant a lien against undisbursed construction funds in the
possession of either the owner or the lender.
A properly served and perfected claim on a payment bond gives the claimant the right to recover the amount owed from the surety that issued the bond. For
private works of improvement, the Mechanic’s Lien and Stop Notice are
cumulative remedies which can be simultaneously pursued along with a suit
for breach of contract on the underlying debt.
Generally, a Mechanic’s Lien cannot be filed on a publicly owned
parcel of real property. On
An understanding of Mechanic’s Lien, Payment Bond and/or Stop Notice procedures can greatly increase the chances of eventual collection by the subcontractor or supplier. The Lien and Stop Notice laws are extremely technical and even the smallest failure to take the proper steps, at the proper time and in the proper order, can result in the complete loss of the claimant's Mechanic’s Lien and Stop Notice rights. It should be noted that even if these remedies are lost, the unpaid contractor may still sue the party with whom it contracted for the amount owed. The following chart sets forth the various remedies:
(1)
perform
services, provide labor or provide materials to the project; (2)
the
services, labor or materials which were supplied must be used or consumed
in the project; and (3)
the
owner or his representative (e.g., general contractor) must authorize the
services or materials. The
Mechanic’s Lien, Stop
Notice and Payment Bond procedures involve three basic steps:
First
Serving a preliminary 20-day notice;
Second Recording
the Mechanic’s Lien, serving the Stop Notice or making the claim on the
payment bond; and
Third
Filing a lawsuit to: (1) foreclose the Lien; (2) enforce the Stop
Notice, or (3) enforce the claim against the surety. Accompanying this article is a
Simplified Private Work Mechanic’s Lien that sets forth the basic steps
for exercising these unique remedies.
As previously stated, if you intend to use these
remedies you must comply precisely with the statutory conditions
for using them. If you are
unfamiliar with the requirements, it is recommended that you attend a
seminar on the lien laws. If
you have a specific question about application of the lien statutes to
your particular situation, you should seek the advice of legal counsel who
is familiar with this area of SIMPLIFIED
PRIVATE WORK MECHANIC LIEN
AND
STOP NOTICE ACTION GUIDE FOR PRIVATE
WORK OF IMPROVEMENT
This table is a simplified overview
of the time deadlines for filing a stop notice and/or mechanic lien on a
private work of improvement. There are exceptions to the deadlines and
applications of the remedy. This chart, and the above article, © 1999,
was prepared by William C. Last, Jr. of Last, Harrelson & Faoro,
members of the Bay Area Chapter of ASA.
Mr. Last is an attorney who has been specializing in Construction
Law for over eighteen years. Mr. Last also holds a
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