What is a Mechanic's Lien?

A Mechanic’s Lien is a legal tool used in California residential real estate law that gives contractors, suppliers and other individuals who have improved property the right to secure payment from the property owner. It is essentially an unpaid contract placed against the property which gives the lien holder the legal right to keep the property until their payment for work done is received. When a contractor finishes work on a residential property in California, they are allowed to file a Mechanic’s Lien with the County Recorder’s Office. This lien acts like a lien on the property, and it is recorded on the property’s title. Once it is recorded, it becomes a legal claim against the property and its owner until the lien holder receives their money. Until then, the property cannot be sold or refinanced, as the lien must be paid off first. The lien also serves as a form of insurance for the lien holder, as they are ensured to be paid back if the property is eventually sold. Mechanic’s liens can also be used to pursue legal action in the event that the contractor’s payment is not secured. The lien can be foreclosed on, where the lien holder can receive legal ownership of the property and sell it in order to pay off the debt. It is important for both property owners and contractors to be aware of this law in order to ensure that they are properly adapting it in their dealings.

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What is a Mechanic's Lien?

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