BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 457|
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THIRD READING
Bill No: AB 457
Author: Monning (D), et al
Amended: 6/18/09 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 6/9/09
AYES: Corbett, Harman, Florez, Leno, Walters
ASSEMBLY FLOOR : 76-0, 4/20/09 - See last page for vote
SUBJECT : Mechanics lien: claim of lien
SOURCE : Contractors State License Board
DIGEST : This bill requires a mechanics lienholder
(generally a contractor, subcontractor, or material
supplier) on a private work of improvement, after filing a
complaint to foreclose on a mechanic's lien (also known as
a claim of lien), to record in the proper county recorder's
office a notice of the pendency of the proceedings. This
bill requires that a lienholder serve the property owner
with the mechanic's lien and a Notice of Mechanic's Lien.
This bill also provides that failure to serve the
mechanic's lien and Notice of Mechanic's Lien as prescribed
in this bill renders the mechanic's lien unenforceable as a
matter of law.
ANALYSIS : Existing law provides that mechanics, persons
furnishing materials, artisans, and laborers of every class
have a lien upon the property upon which they bestowed
CONTINUED
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labor or furnished material for the value of such labor
done and material furnished. (Article 14, Section 3 of the
California Constitution)
Existing law provides that contractors, subcontractors,
material suppliers, and others who bestow labor, skill,
supplies, or services to a private work of property
improvement have a lien upon the property and establishes
the procedures by which the lien may be recorded and
enforced. (Section 3109 et seq. of the Civil Code)
Existing law provides that a mechanic's lien does not bind
a property for longer than 90 days after recording of a
claim of lien, unless the claimant commences an action to
foreclose on the lien within the 90-day period. Existing
law also provides that a lien may remain in force for a
longer period of time if credit is given and notice of the
fact and terms of the credit is recorded with the county
recorder. However, even if credit is given, the lien may
not remain in force longer than one year from the
completion of the work of improvement if an action for
foreclosure has not been commenced. If the claimant fails
to commence an action to foreclose the lien within the
specified time limitations, the lien is automatically null
and void and of no further force and effect. (Section 3144
of the Civil Code)
Existing law provides that, after filing a complaint to
foreclose on a mechanic's lien, the lienholder may record a
notice of pendency (a "lis pendens") in the proper county
recorder's office. Existing law provides that only from
the time of the recording of such notice is a purchaser or
encumbrancer of the affected property deemed to have
constructive notice of the pendency of the action.
(Section 3146 of the Civil Code)
This bill requires the plaintiff/lienholder, after filing a
complaint to foreclose on a mechanic's lien, to record in
the proper county recorder's office a notice of the
pendency of the proceedings on or before 20 days after the
filing of the mechanic's lien foreclosure action.
Existing law provides that a "claim of lien" means a
written statement, signed and verified by the claimant that
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contains all of the following information:
1. A statement of the claimant's demand after deducting all
just credits and offsets.
2. The name of the owner or reputed owner, if known.
3. A general statement of the kind of labor, services,
equipment, or materials furnished by the claimant.
4. The name of the person by whom the claimant was employed
or to whom the claimant furnished the labor, services,
equipment, or materials.
5. A description of the site sufficient for identification.
(Section 3084 of the Civil Code)
This bill provides that a "claim of lien" or "mechanic's
lien" means a written statement, signed and verified by the
claimant that contains, in addition to the above five
pieces of information required by Section 3084, a proof of
service affidavit completed and signed by the person
serving the Notice of Mechanic's Lien. A "proof of service
affidavit" is an affidavit of the person making the
service, showing the date, place, and manner of service and
facts showing that the service was made in accordance with
this section. The affidavit shall show the name and
address of the person(s) upon whom a copy of the mechanic's
lien and the Notice of Mechanic's Lien was served, and, if
appropriate, the title or capacity in which he/she was
served.
This bill requires that a mechanic's lien and the
accompanying Notice of Lien 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 on file. This bill provides that, if the owner or
reputed owner cannot be served, the notice may be given by
registered mail, certified mail, or first-class mail to the
construction lender or to the original contractor.
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This bill provides that failure to serve the mechanic's
lien and the Notice of Mechanic's Lien, as prescribed by
the bill's provisions, would cause the mechanic's lien to
be unenforceable as a matter of law.
This bill provides that its provisions become operative on
January 1, 2011.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: Yes
SUPPORT : (Verified 6/23/09)
Contractors State License Board (source)
Air Conditioning Sheet Metal Association
Air-conditioning and Refrigeration Contractors Association
American Federation of State, County and Municipal
Employees
American Fence Contractors Association, California Chapter
Building Industry Credit Association
California Chapters of the National Electrical Contractors
Association
California Fence Contractors' Association
California Legislative Conference of the Plumbing, Heating,
and Piping Industry
California Professional Association of Specialty
Contractors
Engineering Contractors Association
Flasher/Barricade Association
Marin Builders Association
Plumbing-Heating-Cooling Contractors of California
ARGUMENTS IN SUPPORT : The sponsor, the Contractors State
License Board, writes:
"Under existing law, mechanic's lien filing procedures do
not include a requirement that the property owners be
notified when a lien is placed against their property.
Furthermore, many liens are not pursued and become void
and unenforceable by operation of law, clouding the title
of the property on which they were filed. Consequently,
consumers are left with the responsibility of addressing
the lien, but are frequently unaware of the options
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available to deal with the lien once it is discovered.
Most notably, many property owners do not realize that an
expired mechanic's lien can be expunged by court action,
and often pay the lien claimant even though they have
already paid the prime contractor for the services
covered by the lien.
"The goal of AB 457 is to provide all parties involved in
a construction-related transaction with an opportunity to
deal with the relevant obligations in advance of the
legal and financial issues that result from a mechanic's
lien. Also, for those situations where a foreclosure
suit is filed by a contractor, notice of the action
should be available to all parties who are interested in
the property in question."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Caballero, Carter, Conway, Cook, Coto, Davis,
De La Torre, De Leon, DeVore, Duvall, Emmerson, Eng,
Evans, Feuer, Fletcher, Fong, Fuentes, Fuller, Furutani,
Gaines, Galgiani, Garrick, Gilmore, Hagman, Harkey,
Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries,
Jones, Knight, Krekorian, Lieu, Logue, Bonnie Lowenthal,
Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello,
Nielsen, John A. Perez, V. Manuel Perez, Portantino,
Price, Ruskin, Salas, Saldana, Silva, Skinner, Smyth,
Solorio, Audra Strickland, Swanson, Torlakson, Torres,
Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Buchanan, Charles Calderon, Chesbro,
Hall
RJG:mw 6/23/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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