Thursday, December 30, 2021
Content courtesy of Milene C. Apanian of Abdulaziz, Grossbart & Rudman
By: Milene C. Apanian of Abdulaziz, Grossbart & Rudman
Mechanic's Liens, Stop Payment Notices and Collection Activities and Lawsuits
You did the work, but you remain unpaid. For weeks (if not months), you patiently waited and cooperated in the hopes of getting paid without "rocking the boat." But the deadline to record your lien is fast approaching and you just heard "you will be paid shortly" one too many times. Frustrated, you contact your attorney and request that a mechanic's lien be recorded TODAY!
The problem is that the pandemic has even impacted the logistics for recording mechanic's liens. It is nearly impossible for you, your attorney and lien services to currently prepare and record a mechanic's lien the same day (or even the next day). In fact, during the early months of the pandemic, it sometimes took 4 to 6 weeks and sometimes 8 weeks to record a document. Recording a mechanic's lien requires planning and cannot be left to the last minute. This article explains why:
The Original Document is Necessary
Mechanic's liens must be verified by the lien claimant, or the claimant's counsel, prior to the document being recorded. This means that the claimant/counsel must, under penalty of perjury, state that they have read/reviewed the mechanic's lien and know the content is truthful and that the claimant/counsel is authorized to sign the mechanic's lien. In order to record the mechanic's lien, the original document, with the wet signature on the lien and the verification must be presented to the county recorder's office for recordation. Therefore, you must figure out a way to get the original document to your attorney and the county recorder's office.
The Recorder's Offices Operate at Limited Hours and Require Appointments
Since the pandemic started, some county recorder's offices have reduced operating hours and are NOT open to the public. The Los Angeles County Recorder's Office is an example. It was closed for over a year with NO in-person services available to the public, to attorney services or to attorneys. Even after recently reopening, the LA County Recorder's office has limited hours and strict in-person procedures. Norwalk (main branch), LAX/Courthouse, Van Nuys, and Lancaster branches record documents BY APPOINTMENT ONLY. The appointments are available online only two weeks in advance and are typically booked and unavailable. While writing this article (and on multiple days) I attempted to reserve an appointment at the various locations, and all were booked for the next two weeks! Note: Mechanic's liens can be mailed to the recorder's office, but the turnaround time is unknown.
Mechanic's Lien Can Be Rejected and Returned Without Being Recorded
It is not uncommon for the recorder's office to reject and not record a mechanic's lien for even minor technical reasons. Examples include portions of the notary stamp being faded, or some letters not being properly capitalized. It also appears that due to staffing challenges, temporary and new employees are processing the documents for recordation and sometimes unnecessarily rejecting mechanic's liens. Once a document is rejected, it must be corrected and resubmitted!
The Recorder's Offices Do NOT Backdate Documents
Once a mechanic's lien is submitted to the recorder's office (whether in-person, or electronically), the document is put in a queue and then processed. It can take days or weeks for the document to be processed. The mechanic's lien is stamped "recorded" on the date the document is processed NOT when the document was submitted. This means that your mechanic's lien will NOT be recorded the day it is submitted to the recorder's office. The processing time will depend on the county and the county recorder's workload at the time of submittal. It is unpredictable and cannot be guaranteed.
If the recorder rejects your document, it must be resubmitted as a new document, and you are back in the queue once again waiting to be processed. Even if the county delayed the recordation, the mechanic's lien will NOT be backdated.
Online Recordations Are Still Not Available To Attorneys
While some title companies and attorney services may have the capability to electronically record property related documents, electronic recording is not yet available to attorneys. Even if attorneys outsource the recordation to vendors with electronic recording capabilities, the original document with the wet signature must be delivered for the digital recordation. This process takes at least a day. Then, when the document is electronically submitted to the county recorder's office, it is not immediately recorded and is placed in the electronic queue and recorded once the county processes the document.
It has now become nearly impossible to prepare, serve and record a mechanic's lien the same day! Since the deadline to record a mechanic's lien can often be short, plan ahead and do not leave your mechanic's lien to the last minute! Give yourself (and your attorneys) at least three to four weeks and sufficient time to deal with unexpected glitches and delays.
If you are unfamiliar with preparing or recording mechanic's liens or have specific questions about application of the mechanic's lien laws and deadlines, you should seek the advice of legal counsel who is familiar with California lien laws.