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Mechanics Lien Form Dollar Amounts

The value on the mechanics lien form isn't always equal to the contract balance owed to the claimant at the end of the projects

The value of a mechanic's lien is limited to the labor and/or materials and/or equipment etc. that are actually incorporated into the property.

A lumber supplier who supplies $10,000 of lumber to a framing subcontractor for use on a particular property will only have mechanic's lien rights for the quantity of lumber that is incorporated into the property.

Further, the value of a mechanics lien is equal to the lesser of:

  • 1) the value of labor and/or materials and/or equipment etc. provided to the project or

  • 2) the contracted price of the labor and/or materials and/or equipment etc. provided to the project

A lawsuit on a mechanics lien will require the claimant to prove more than a lawsuit on a contract claim

In regards to the value of a mechanics lien, the claimant must show:

  • 1) that either a valid Preliminary Notice was served or that no Preliminary Notice was required;

  • 2) that the mechanic's lien was timely recorded;

There are several requirements prior to filing a lawsuit on a mechanic's lien.

  • 3) that the lawsuit was filed within 90 days of the date that the mechanics lien form was recorded; and
  • 4) the value of labor and/or materials and/or equipment etc. provided to the project or the contract price owed to the claimant, the portion of this value that remains unpaid, and that the labor and/or materials and/or equipment etc. were actually "incorporated" into the project.

Inclusion on the mechanics lien form of the labor and/or materials and/or equipment etc. on the project

It is important to note that the entirety of labor and/or materials and/or equipment etc. does not need to actually be "included" in the building.

For example, a framer will cut pieces of lumber but not all of those pieces will actually become part of the building. Cutting off end pieces of lumber is a necessary part of the process and the value of the mechanics lien includes the whole stick even though the end pieces are scrap and as such are discarded.

The entirety of labor and/or materials and/or equipment etc. does not need to actually be incorporated into the building.

Likewise, equipment used on the project will not be included or "incorporated" in the building; the claimant need only show that the equipment was used to improve the project and therefore is part of the value of the mechanics lien, and included on the mechanics lien form.

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Thank you to Dave Barnier for the above information. :) Mr. Barnier is a practicing litigation attorney in San Diego CA and can be reached at 619.682.4842.

The information in this article is based upon California law current at the time of writing and is provided for general information, only. The information provided illustrates laws and legal principals in general. Any information or analysis presented in this article is intended solely to educate the reader on general issues. A comprehensive review of facts, documents, and applicable laws is always required before any attorney can competently provide any legal advice regarding any particular situation. In short: Please do not rely on any part of this article when analyzing any specific situation affecting you or your business.

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California Mechanics Lien Form
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Mechanics Lien Form Dollar Amounts

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$14.95
California Mechanics Lien Form
Excel and PDF

Instant Download
Fill-able
Save-able
Unlimited Usage!
Includes In-Depth Instructions

Construction-Business-Forms.com


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