Feb 42015

Who is Entitled to a Mechanics Lien?

(This is Part 2 of our Mechanics Lien Series)

Generally, any person who provides work authorized for a work of improvement or site improvement on real property is entitled to a mechanics lien, including, but not limited to:

  1.  Direct contractors;
  2.  Subcontractors:
  3.  Material suppliers;
  4.  Equipment lessors;
  5.  Laborers; and
  6.  Design professionals.

The term “work” includes labor, services, materials, equipment, special skills, and other necessary services. Work is authorized if it is provided at the request of or agreed to by the owner, or if it is provided or authorized by a direct contractor, subcontractor, architect, project manager, or other person having charge of all or part of the work of improvement or site improvement.

A “direct contractor” is a contractor that has a direct relationship with an owner.

A “subcontractor” is a contractor that does not have a direct contractual relationship with an owner. The term includes a contractor that has a contractual relationship with a direct contractor or with another subcontractor.

A “material supplier” is a person that provides materials or supplies to be used or consumed in a work of improvement.

An “equipment lessor” is a person that provides equipment to be used on a work of improvement.

A “laborer” is a person who, acting as an employee, performs labor upon, or bestows skills or other necessary services on, a work of improvement.

A “design professional” is a person licensed as an architect, landscape architect, or land surveyor, or a person registered as a professional engineer. Design professionals are able to record liens prior to the commencement of the planned work of improvement. Please note there are certain requirements specific to design professional liens that are beyond the scope of this discussion. For more information, please refer to the California Civil Code, Sections 8300-8319.

The term “person” means an individual, corporation, public entity, business trust, estate, trust, partnership, limited liability company, association or other entity.

Although not specifically named in any statutes, California courts have held that house movers and persons that transport materials to a work of improvement have mechanics lien rights. On the other hand, California courts have held that money lenders, tenants, equipment vendors (as opposed to lessors), and purveyors to material suppliers do not have mechanics lien rights.

I hope you found this article to be helpful. Please feel free to forward it to anyone you believe would benefit from the information. Stay tuned for Part 3 – How is the Amount of the Mechanics Lien Determined?

The information provided herein is not intended as legal advice and should not be acted upon. If you have additional questions about this subject matter or would like to consult with an attorney about this or related subject matters, please call or email Josef Cowan at the Cowan Law Group (949) 333-0919 or at jcowan@cowanlawgroup.com.

Filed by Joe Cowan, February 4, 2015