March/April 2013

Abdulaziz, Grossbart & Rudman Newsletter
March/April 2013

We hope that you enjoy this edition of our Newsletter.
Remember, if there is anything that you would like to see in the future, please let us know.
The Staff At
Abdulaziz, Grossbart & Rudman



Our office frequently talks about Mechanic's Liens and the reason a Mechanic's Lien is so important in the construction industry. A Mechanic's Lien is a document that, when recorded, gives contractors, engineers, material suppliers, designers, etc., a lien on the property that the work was done on for which compensation has not been received. It puts a cloud on title to the property until the contractor is paid, giving the mechanic the right to foreclose on the property by filing a lawsuit. However, there are very specific steps leading up to the enforcement of a Mechanic's Lien. Please note that some these laws changed in 2012 and we figured that a quick rundown may be necessary.


Unless you have a direct contract with the owner of the property, a properly completed Preliminary Notice must be properly prepared and served within 20-days of first furnishing labor and/or materials to the job in order to insure that your Mechanic's Lien is enforceable. If a Preliminary Notice is not filled out properly and properly served, it can mean that all of part of your future Mechanic's Lien is void. If there is a construction lender on the project you are working on, you must prepare and serve the Preliminary Notice even if your contract is with the owner.


Once the job is substantially complete or labor ceases for 60-continuous days, then you have 90-calendar days within which to record your Mechanic's Lien. If a valid Notice of Cessation or Completion has been recorded, then the 90-day time frame is shortened to 60-days if you are the direct contractor and 30-days if you are a subcontractor or material supplier. If the Mechanic's Lien is not recorded within these specified time periods, then the Lien is void.


In order for a Mechanic's Lien to comply with the law it must contain the following:

  • The amount demanded - Keep in mind that this is supposed to be a reasonable value of the services or materials naturally incorporated into the project. If the Mechanic's Lien amount is overstated, the courts can invalidate the entire lien and therefore the suit to foreclose on the property.
  • The name of the owner or reputed owner - In this instance, it is better to have too many names listed, even if they are not correct rather than miss out on the one name that is correct. This also includes the use of various surnames or aka's.
  • A general statement of labor, services, equipment, etc., that is furnished on the project
  • A description of property that is sufficient for identification in order to bind the property
  • Claimants signature and verification
  • Proof of service affidavit
  • A "Notice of Mechanics Lien"

Once the Mechanic's Lien is recorded, the contractor has 90-calendar days within which to file a lawsuit to foreclose on the property. The courts are very strict with their interpretation of the Mechanic's Lien statutes so if the suit to foreclose on the lien is not filed within the 90-day time frame, the Mechanic's Lien claim will be deemed invalid. Keep in mind, that the lawsuit to foreclose on a Mechanic's Lien is not prepared overnight. Make sure to give your construction attorney enough time to prepare the lawsuit and have it filed with the court.


If you need more than 90-days within which to file the lien foreclosure action, you can give credit to the owner by utilizing a Notice of Extension of Credit. This document must be signed and notarized by both the owner and mechanic. It should be recorded prior to the expiration of the 90-days. There are now some exceptions where the extension notice can be recorded after the 90-days. The purpose of this extension is to extend the time within which the foreclosure action can be filed with the courts. This procedure is handy when you and the owner are trying to resolve the dispute.


Once the foreclosure action is filed with the courts, a Notice of Lis Pendens must be filed with the court and recorded with the county recorder within 20-days of filing the lawsuit. This notice secures the claim of the contractor on the property. Then the lawsuit process really kicks in. Hopefully, you will be lucky enough to settle the matter before it even gets to this point.


Now that you have reviewed this quick rundown, we hope that you see how detailed the process of perfecting your Mechanic's Lien rights can be. There are many requirements in place as well as timing as to when certain things should be done or filed. It is very important to seek the aid and advice of a competent construction attorney for help with the Mechanic's Lien process. This should be done even before you realize you need to record a Mechanic's Lien.

A building contractor was being paid by the week for a job that was likely to stretch over several months. He approached the owner of the property and held up the check he'd been given. "This is five hundred less than we agreed on," he said.
"I know," the owner said. "But last week I overpaid you five hundred, and you never complained."

The contractor said, "Well, I don't mind an occasional mistake. But when it gets to be a habit, I feel I have to call it to your attention."


All contractors in California need to have a license bond on file with the Contractors' State License Board. The license bond is basically for owners and other persons who have been damaged because of a violation by a contractor. It also helps protect employees of contractors who are damaged by the contractor failing to pay wages.


A contractor's license will not be renewed, issued or made active again from an inactive status unless the license bond is on file. The bond must be in the amount of $12,500. Please remember that your business name and license number on the bond has to match exactly with the CSLB's records.


It should be noted that the bond must be submitted within 90-days of the effective date of the bond. Due to backlogs, you should contact the surety provider at least a month before the paperwork is actually due. This is also true for when you are renewing your license bond. Renewals are not automatic.


The bond is not an insurance policy. The contractor is still liable for its obligations and has to pay the surety back for any losses incurred by the surety that were a result of the contractor's actions. This is a reminder that you should always practice safe construction practices. Also, if for some reason you disassociate from a license, be sure you notify the bond surety that you will not be responsible for future claims on the bond.



A couple drove down a country road for several miles, not saying a word because an earlier discussion lead to an argument. Neither of them wanted to concede their position.
As they passed a barnyard which contained mules, goats and pigs, the husband sarcastically asked, "Relatives of yours?"

"Yep," the wife replied. "My in-laws."

By becoming a registered user of our website, you will have access to valuable information, now and in the future.

Currently, there are over 25 forms available as well as discounts on our Construction Law Book and our workbook. Check back often as future plans include more forms, seminar discounts and webinars.

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Utilizing Construction Documents as a Risk Management Tool
Presented by Milene C. Apanian
Hosted by Credit Management Association (CMA)
Tuesday, June 11, 2013
9:00 a.m. to 10:00 a.m.
Easy signup at
This webinar will cover:
  • Identify key documents that are necessary to proving a supplier's collection lawsuit
  • Hear how to prepare the project file before selling materials to the job
  • Learn how to document deliveries, oral modifications, extras and the project itself
  • Understand the litigation and discovery process. Identify privacy and privilege issues related to the disclosure of project documents during litigation
  • Learn to avoid common mistakes related to the use of e-mails and
  • Find out how to doge pitfalls and embarrassments

Email any questions to

Abdulaziz, Grossbart & Rudman
provides this information as a service to its friends and clients. This Newsletter is of a general nature and is not intended to be a substitute for legal advice. This Newsletter does not establish an attorney-client relationship with the reader. Since laws are ever changing, please contact an attorney before using any of the information contained within this Newsletter.
Abdulaziz, Grossbart & Rudman
P.O. Box 15458, North Hollywood, California 91606
(818) 760-2000; (818) 760-3908 (fax)
In This Issue
Mechanic's Lien Rundown
Payment ... HaHaHa
License Bonds
It's All Relative ... HaHaHa
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