Mechanic's Liens

• Author: Carol J. Patterson - Ross J. Altman - Stephen A. Hess - Allen Overcash
• Pages: 529-556

CHAPTER

529

17.01 ORIGIN OF MECHANIC’S LIEN

A mechanic’s lien is a recorded security interest in real property created with-

out the owner’s expressconsent. As such, a mechanic’s lien is arguably the

most valuable tool available to secure payment services and materials on

private works construction projects. A properly perfected mechanic’s lien

attaches to the property where the services and/or materials were provided;

for the amount of the lien is the value of those services or materials provided

or the amount by which the property’s value has been improved. If payment

for the services or materials is not made, then the lien may be foreclosed and

the property sold to satisfy the debt. Thus mechanic’s liens offer protections

beyond simple contract remedies because the value of the work is preserved in

the property itself.

Mechanic’s Liens

EILEEN M. DIEPENBROCK

17

The author thanks Conner D. Johnston, an attorney at Diepenbrock Elkin Gleason LP in Sacra-

mento, California for his valuable assistance in the preparation of this chapter.

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CONSTRUCTION LAW

530

A properly perfected mechanic’s lien clouds the title of the property not

only as to the owner at the time the lien is recorded but also as to subsequent

purchasers, encumbrancers, and third parties, including, in many states, lend-

ers who record their deeds of trust after the services rst began or materials

were rst provided. In this way, mechanic’s liens are similar to a mortgage or

deed of trust encumbering a house or building as security for repayment of a

loan. The key difference is that mechanic’s liens are statutory in origin and

may be placed on the owner’s property without the owner’s consent. Further,

the parties entitled to encumber the owner’s property with a lien include those

who are not in privity of contract with the owner, such as subcontractors.1

Mechanic’s liens were unknown at common law. Mechanic’s liens owe

their origins to Thomas Jefferson and James Madison. In 1791, to encourage

building the new Capitol building in Washington, D.C., a lien was established

by statute and granted to master builders for the erecting and nishing of

houses. Maryland passed the new legislation rst, followed by Pennsylvania

in 1803.2 Today, each state has its own statutory scheme to protect suppliers

of services and materials on private works construction projects by giving the

suppliers lien rights, subject to strict compliance with various lien prerequi-

sites and procedures.3

The nature and importance of these lien rights can be understood by exam-

ining their role in California. In California, lien rights are a creature of the

state’s constitution, with implementing statutory procedures for enforcing

them.4 In upholding the constitutionality of these lien rights, the California

Supreme Court considered the competing interests of the lien claimants ver-

sus the property owner who effectively suffers a so-called taking of its prop-

erty by the imposition of the lien.5 The court determined that the property

owner “suffers only a minor deprivation by reason of the lien since he retains

possession and use of the land.” As discussed more fully later, the property

owner also has protections against improper liens through the various statu-

tory requirements imposed on lien claimants.6 On the other hand, “the worker

whose labor has gone into the property . . . would suffer a major deprivation

1. Indus. Asphalt, Inc. v. Garret Corp., 180 Cal. App. 3d 1001 (1986);

stePhen a. hess

, a

Mechanics’ lien PriMer

(Construction Briengs, May 2008).

2.

Bruce h. schOuMacher, Mechanics’ liens

§19.02 (Construction Law, 2007), citing

harOld sie

-

Gan, cases and cOMMents On Mechanics’ liens

(1981) and

lawrence friedMan, a histOry Of aMerican

law

(Simon & Schuster 1973).

3. See generally

rOBert f. cushMan & stePhen d. Butler

,

fifty state cOnstructiOn lien and BOnd

law

, 2d ed. (Aspen Law & Business 2000 and 2010 Cumulative Supplement).

4.

cal. cOnstitutiOn

, Art. XIV, §3.

5. Connolly Dev. Inc. v. Superior Court, 17 Cal. 3d 803, 807 (1976).

6. Id. at 806–07.

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