BILL ANALYSIS Ó AB 456 Page 1 Date of Hearing: September 9, 2011 ASSEMBLY COMMITTEE ON JUDICIARY Mike Feuer, Chair AB 456 (Wagner) - As Amended: September 2, 2011 FOR CONCURRENCE SUBJECT : MECHANICS LIENS KEY ISSUE : SHOULD THE AFFIDAVIT FOR SERVICE OF A MECHANICS LIEN BE CLARIFIED TO MORE CLOSELY REFLECT THE MANNER OF SERVICE? SYNOPSIS Mechanics lien claims are required to be served upon the owner or reputed owner of the property, and the statute specifies the manner of service when the owner or reputed owner resides within or outside the state. If the owner or reputed owner cannot be served by that method, the statute allows notice to be given as prescribed to the construction lender or to the original contractor. In either event, an affidavit of service must be executed in order for the claim to be enforceable. This bill clarifies the language of the statute regarding this affidavit so that it better conforms to the statute regarding the method of service and to avoid confusion and inadvertent error. There is no known opposition. SUMMARY : Clarifies the procedure for mechanics liens claims. Specifically, this bill clarifies that mechanics lien claimants in construction disputes shall specify in the required affidavit indicating service of the notice of mechanics lien that the notice was served on the owner or reputed owner of the property, consistently with existing obligations regarding service of these claims. FISCAL EFFECT : None COMMENTS : According to the author, existing law requires that a mechanics lien and the accompanying Proof of Service Affidavit be served on an owner or reputed owner by registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing, postage prepaid, addressed to the owner or reputed owner at the owner's or reputed owner's residence or place of business address or at the address shown by the building permit AB 456 Page 2 on file. The author notes that this bill would provide clarification and consistency to ensure that, if the owner or reputed owner is listed in the Proof of Service Affidavit, there would not be the opportunity to invalidate the lien based on a minor error in the name, part of the name or title. According to supporters: Passage of this measure is critical, because it makes an important clarifying change to existing law that, if left unchanged, could result in mechanics liens being invalidated due to very minor errors. . . . Throughout the Civil Code Sections 3084 and Ý8]146, and in the mechanic's (sic) lien itself, it requires the name of the owner or reputed owner while in the Proof of Service Affidavit it requires the name and title of the person served. In a day-to-day application of this new law those who are preparing the mechanic's lien, and the Proof of Service Affidavit that is now required, often do not know or have access to accurate information regarding the specific name and title of a person to be listed on the Proof of Service Affidavit, which is now part of the mechanic's lien. This is true particularly when the property is owned by a business organization. This creates a large problem because the new statuÝt]e states that: "Failure to serve the mechanic's lien, including the notice of mechanic's lien, as prescribed by this section, shall cause the mechanic's lien to be unenforceable as a matter of law." AB 456 is a simple amendment to the new statute to insert "owner or reputed owner" where the current statute specifies "person or personsÝ,"] and in doing so, provides clarification and consistency in the code to ensure that, if the owner or reputed owner is listed in the Proof of Service Affidavit, then there Ýwould not] be the opportunity to invalidate the lien based on a minor error in name, part of the name, or title. Thus, supporters argue, this bill makes an important clarifying change to existing law that, if left unchanged, could result in mechanics liens being invalidated due to very minor errors. REGISTERED SUPPORT / OPPOSITION : Support AB 456 Page 3 Air Conditioning and Refrigeration Contractors Association Air Conditioning and Sheet Metal Association Building Industry Credit Association California Chapter of the American Fence Association California Chapters of the National Electrical Contractors Association California Fence Contractors' Association California Landscape and Irrigation Council California Legislative Conference of the Plumbing, Heating, and Piping Industry Construction Industry Force Account Council Engineering Contractors' Association Flasher Barricade Association Marin Builders' Association Opposition None on file Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334