Thursday, May 7, 2020

By Milene C. Apanian, Esq.
Abdulaziz, Grossbart & Rudman

Since earlier Alerts, clients have been asking about the current status of recording mechanic's liens during the Covid-19 pandemic. As it stands, the various County Recorder's offices are still closed to the public, including attorney services and attorneys. 

The County Recorder's offices are currently open and functioning. New mechanic's liens, mechanic's lien releases and other documents can be recorded. Here are a few things to keep in mind if you are considering recording a mechanic's lien on a project to help collect for work performed:

Venue For Recording Mechanic's Liens:

Mechanic's liens must be recorded in the county where the property is located. Where you are recording your mechanic's lien will determine the processing time for your mechanic's liens. Each county has issued its own Covid-19 order and currently has different operating hours, staffing issues and concerns, and therefore each county recorder's office has a different turn-around time. Over the past few weeks, our office has recorded mechanic's liens in different counties, including Los Angeles, Orange, Merced, Fresno, Solano Counties. Each county has had a different response time. Some took two weeks; others took four or six weeks to return the recorded document. Documents sent to the same county on the same day have had different return times. The processing times change depending on the county workload, staffing and backlog, and is changing constantly. 

Recordings are Done Through the Mail:

Prior to the Pandemic, mechanic's liens could be recorded in person at the county recorder's office with a same day confirmation. Additionally, attorney services were able to hand carry the mechanic's liens to the county recorder's office and return the recorded document fairly quickly. As of this update, most county recorder's office (if not all) are still closed to the public and therefore the expedited - or in person recording - options are unavailable. Mechanic's liens must now be mailed to the county recorder's office. This adds additional time to send the document to be recorded, and to receive the recorded document back from the recorder's office. Some documents mailed to our office have taken seven days to be delivered. 

Furthermore, it is our understanding that mechanic's liens are recorded with the date that the recorder's office processes and actually records the document. They are not backdated to the date the document was received at the recorder's office. This means that the date the mechanic's lien is recorder is out of our control and depends on when the recorder's office processes the document. Depending on the county recorder's office's backlog, a mechanic's lien can sit at the county for a day, a week, or a number of weeks. It is currently impossible to confirm the recordation of the mechanic's lien on an expedited basis. The recordation is confirmed once the recorded documents is received back from the recorder. 

Deadlines for Recording Mechanic's Liens:

Calculating the deadline to record a mechanic's lien is a fact-based analysis based on the project timeline and the different mechanic's lien statutes. Since each project has its own unique facts and situation, this update does not provide a detailed analysis of the various deadlines. However, remember two key points:

(a)  The deadline to record a mechanic's lien is calculated based on the project completion date. (Completion is a statutory term with specific legal meaning.) Whether a project is "completed" requires a legal analysis of the project specific facts and is beyond this update. Keep in mind that depending on the facts and circumstances, the deadline to record a mechanic's lien is 90 days from the project completion date. However, if a "notice of completion" or a "notice of cessation" is recorded for the project, general contractors have 60 days, and subcontractors have 30 days from the recordation of the notice of completion/cessation. 
 
(b)  As of this update, we are unaware of any emergency order, law, or statue that tolls (or puts on hold) the deadlines (statute of limitations) for recording mechanic's liens during the pandemic. This means that all mechanic's liens must be recorded based on existing California statues, even if the county recorders' offices are backlogged.

Project Cessation:

As a result of the Covid-19 pandemic, some construction projects have been suspended, either because of governmental orders preventing construction, or because the project owner/developer has decided to temporarily suspend construction activities. Regardless of the reason for the suspension, if a project is on hold or suspended for more than 60 days, that project is deemed "completed" under California statutes. Therefore, the deadline to record a mechanic's lien is triggered, even if the project is resumed. 

CONCLUSION:

The point of this update is, do not delay recording your mechanic's lien. It is now taking longer to deliver the mechanic's lien to the county recorder's office; for the county recorder's office to record the mechanic's lien; and to receive the recorded mechanic's lien back from the county recorder's office. In some cases, it has taken four weeks to send, record and receive back a mechanic's lien. If you are owed money on a project and are debating whether to record a mechanic's lien, or delay the recordation in the hopes of receiving payment, be reminded that by the time you decide to act and record your mechanic's lien, you may be out of time. Do not procrastinate, act sooner than you would have before Covid-19. Stay safe! 

If you need assistance with recording a mechanic's lien or getting paid on projects, email me at  mca@agrlaw.com to discuss further.