The deadline to enforce on a Mechanics Lien is 7/11/19. The customer asked if they have until 7/11 to pay, or if they have to have it paid prior to that date because of processing time?
1 reply
Jun 5, 2019
That's a good question, and looking at exactly what a lien enforcement/foreclosure deadline means should help provide some clarity here.
The deadline to enforce a mechanics lien is the date by which a lawsuit must be filed to enforce a filed mechanics lien. In California, it's 90 days after the lien was filed. So, if that date comes and goes and no lawsuit is filed to enforce (and potentially foreclose) the lien, then the ability to recover from that lien will more or less dissipate - and a claimant may need to pursue some other avenue of recovery.
Now, because a lien enforcement is the actual filing of a lawsuit, it's worth noting that it takes some preparation. Meaning, claimants generally begin preparing to file their enforcement action at least several days prior to filing the suit - preferably longer. It makes sense - most parties don't file a lawsuit on extremely short notice - there's preparation that must come into play.
Ultimately, that means for most lien claimants, a customer's promise to pay right at the lien enforcement deadline should serve as little consolation. Instead, if payment discussions are being had, a lien claimant will generally be much better off making sure payment is scheduled or made well before the deadline to enforce their lien. That way, if any issues arise or if any funny business takes place, there will still be time to prepare and file a lien enforcement action, if necessary.
Lastly, it's worth mentioning that the lien enforcement deadline can be extended in California through what's called a Notice of Credit. When a Notice of Credit is filed, this extends the lien enforcement deadline to 180 days from the date when the mechanics lien was originally filed.
In order to extend the mechanics lien deadline through a Notice of Credit, both the claimant and the property owner must agree to extend the timeframe for enforcing the lien claim - and then the Notice of Credit document must be signed by both parties, then filed in the county, much like the original lien was filed. Because the document requires both the claimant and the owner to agree on extending the lien timeframe, it's not always practical. However, in a situation where payment terms are being worked out and the owner has been willing to work with the lien claimant, using a Notice of Credit might be a good option to extend the timeframe a little bit. Plus, if payment still isn't made after the lien is extended, the lien claimant can still move forward with enforcing their lien.