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Mechanics Lien Judgment vs Money Judgment

Likes and differences between the mechanics lien judgment and the money judgment

A "money judgment" can be based upon a contract, a tort (such as a personal injury claim), or various other types of claims. A money judgment can be enforced by levying almost all types of property owned by the judgment debtor.

By contrast, a judgment on a mechanic's lien merely entitles the mechanic's lien claimant to implement a foreclosure sale as to the property, with the proceeds of the foreclosure sale going to the parties with claims on the title in the order of their priority.

The mechanic's lien judgment doesn't allow for levying of accounts or other property.

Unlike a "money judgment", a mechanic's lien judgment does not allow the claimant to levy any bank accounts or any other personal property of the owner.

A mechanic's lien by itself does not entitle the claimant to an equitable claim in the property until a lawsuit has been filed on the mechanic's lien and a judgment is entered on the mechanic's lien.

There's definitely a big difference when it comes to mechanics lien judgments vs other judgments.

How the mechanic's lien affects the property owner

A mechanic's lien is recorded with the county recorder and is seen by any person that researches the title to the property at the county recorder's office.

The mechanic's lien provides notice to any interested person that the claimant may pursue his equitable claim against the property via a lawsuit (or at least that the claimant has reserved his right to pursue his equitable claim via a lawsuit).

If a judgment is ultimately entered after a lawsuit on the mechanic's lien is filed, the claimant has the right to foreclose on the property and to recover the proceeds of a foreclosure sale according to the claimant's position on title.

The mechanic's lien judgment should keep the owner from being able to sell his property because buyers don't want liens. It can also keep him from getting home equity loans.

Lenders will be concerned about lending money to a property owner if a mechanic's lien has already been recorded, as the mechanic's lien would provide the mechanic's lien claimant with "priority" over the lender if the claimant obtains a judgment on his mechanic's lien.

Likewise, potential purchasers of the property typically will require that the title to the property be "free and clear" at the time the property is purchased, as mechanic's liens are still valid against the property even if the owner sells the property.

--
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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Excel and PDF

Instant Download
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Unlimited Usage!
Includes In-Depth Instructions

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