At the Alameda County Law Library, we regularly have patrons who approach the Reference Desk and make the following statement – “I want to file a lien.” Tell me more, Pat Patron. That statement alone is not enough information for a law librarian to steer a person to a good resource.
Please note: below is a general overview to help with research into the area of California lien law. This information should not be construed as legal advice. Please obtain legal counsel from a person licensed to practice law in the State of California to decide what actions best fit your legal needs.
California law restricts when people can file liens on property. If a person wants to file a lien because they feel a debt is owed or they feel they have a right to some of the value of a piece of property, they must follow the standards set out under the law and use proper legal forms.
What is the definition of “lien?”
Type in “lien” as a search term in the online version of Black’s Law Dictionary, you get 96 hits. Look under the “L” listing and you find:
lien (leen or lee-ən) n. (16c) A legal right or interest that a creditor has in another’s property, lasting usu. until a debt or duty that it secures is satisfied. • Typically, the creditor does not take possession of the property on which the lien has been obtained.
Black’s Law Dictionary (10th ed. 2014)
Under this entry alone, there are over 70 sub-entries.
Nolo’s website offers a more user-friendly description of a lien, helpful to non-attorneys –
A lien is a notice attached to your property telling the world that a creditor claims you owe it some money. A lien is typically a public record. It is generally filed with a county records office (for real property) or with a state agency, such as the secretary of state (for cars, boats, office equipment, and the like). Liens on real estate are a common way for creditors to collect what they are owed. Liens on personal property, such as motor vehicles, are less frequently used but can be an effective way for someone to collect.
Margaret Reiter, http://www.nolo.com/legal-encyclopedia/what-property-lien.html
This definition illustrates that personal property as well as real property can be subject to liens. It also touches on the issue that simply filing a lien does not produce a flow of money to the claimant. More than one pro per – “in propria persona” or a litigant representing herself without an attorney – has come to the Reference Desk to ask what document is needed to have the court force the other party to pay the judgment just granted. The reality that a successful judgment is just one more step in a long process can be a shock.
So, if Pat Patron states that she wants to file a lien, what should she be asking herself?
Consensual lien – Has the owner of the property voluntarily allowed a lien or an encumbrance to be recorded against the property?
Consensual liens are granted for a number of reasons including: a mortgage for purchase, a reverse mortgage to provide funds in retirement, or, to insure payment for professional services related to the property, such as, solar power installations.
ACLL has titles that provide samples or templates of contracts and recordable documents for these types of business arrangements. We also have practice guides for researching the law that discusses the rights and obligations of the parties involved. The titles include:
- California Legal Forms: Transaction Guide, Volume 10, “Real Estate Transactions” (KFC 68 C32) hard copy only at ACLL
- Warner, How to Buy a House in California, Chapters 8, 9, 10 discuss mortgages and their obligations. (KFC 169.Z9 W37 2000 — Self-Help Area) Also available through the Nolo-EBSCO Legal Information Reference Center database
Judgment lien – Has the patron been successful pursuing a lawsuit within a court and been granted a favorable judgment?
Once a judgment has been obtained, the party needs “to collect” the judgment. An excellent overview of the procedures and strategies to collect what is owed is covered in the title written for non-attorneys – How to Collect When You Win a Lawsuit in California (KFC 1065 Z9 S38 2016). Chapter 4 includes a good summary discussion of judgment liens.
The How to Collect title also discusses liens on personal property – boats, automobiles, art – in addition to real property – land, house, apartment building.
Another title in ACLL’s collection that may be useful to understand the debt collection process is David Cook’s book, The Debt Collector’s Handbook (KF 1024 .C66 2014)
Mechanics’ lien – Is the patron a worker in the construction trade who has provided services related to the improvement of a piece of property?
There are special provisions under the law to help insure payment for people whose skills help increase the value of real property. The United States Founding Fathers introduced the first mechanics’ lien legislation. No such lien rights existed in England where many of the U.S.’s legal concepts are rooted. (See Scott Wolfe Jr.’s post at http://www.zlien.com/articles/a-short-history-of-the-mechanic-lien/).
A mechanics’ lien may be a common form of a lien but the law of mechanics’ liens itself is highly detailed. There are a number of steps that must be taken to insure the lien’s legality. Sources for researching the area of mechanics’ liens:
- CEB’s California Mechanics’ Liens and Related Construction Remedies, Chapter 3, “Preparing, Serving, and Recording Mechanics’ Lien and Notice of Lien” (KFC 229 C3)
- Handling Mechanics’ Liens and Related Remedies (Private Works) (KFC 995 .A1 C35) This CEB Action Guide describes the rights and remedies, including mechanics’ liens, stop notices, and bonds of the principal parties involved in a private work of improvement.
There are also information sources available on the internet –
- “California Mechanics’ Lien Law With Changes Effective July 1, 2012” https://www.nationallienlaw.com/wp-content/uploads/2012/09/Cal-Law-sum-7-122.pdf
- “Mechanics’ Lien: Placing and Releasing Contractors’ Liens” http://tinyurl.com/hdt5uev
- “Understanding Mechanics Liens” http://www.cslb.ca.gov/Consumers/Legal_Issues_For_Consumers/Mechanics_Lien/
Foreclosing on the lien
Because of recent economic events, most people have heard of the term “foreclosure.” Foreclosure is most frequently associated with the process by which a company that provided the money for the owner to purchase a property enforces its legal rights to force a sale of the property to recover the money owed. In a legal context, the term can also be used when a creditor tries to force the sale of any property on which he has filed a lien, allowing him to obtain what is owed. For more information see – 42A California Jurisprudence 3d, Section 60, Jacobs, Liens, VII. Remedies and Enforcement, B. Foreclosure Action. (available on Westlaw.)
Turning again to Black’s Legal Dictionary –
foreclosure (for-kloh-zhər) (18c) A legal proceeding to terminate a mortgagor’s interest in property, instituted by the lender (the mortgagee) either to gain title or to force a sale in order to satisfy the unpaid debt secured by the property. Cf. repossession.
Black’s Law Dictionary (10th ed. 2014)
Most research guides state that undertaking an action to foreclosure on a lien to collect on a debt, though possible, is usually too costly and time consuming to make it worthwhile for an individual who is trying to collect monies owed.
As the author of How to Collect Win You Win a Lawsuit, Andres Schonviesner, states in Chapter 4 –
If the judgment debtor owns real property, the judgment creditor may place a lien on the property. If the debtor tries to sell or refinance the property, the creditor will be paid the judgment amount plus accrued interest from the escrow. In some situations, it may also be possible to “foreclose” on the judgment lien, and force the sale of the property. This is only an option if there is enough equity in the property to pay all existing liens and exemptions, as well as the costs of foreclosure.
Most creditors who file liens on real property wait until the property is sold for other reasons to collect money owed. A number of factors makes this a good strategy – one, when the property is sold or re-financed, there is an expectations of funds becoming available and, two, the new owner will not want to assume burden of the lien. Finance companies want to know the property title is “clear” with no other claims filed in the records prior to theirs.
The law of foreclosure is very complicated and beyond the scope of this post.
Claims involving real estate – lis pendens
Many pro pers come into the library to research filing a “lien” because they want to assert legal rights over a certain piece of property. They want to make a legal claim public so another cannot transfer title. An example would be when an owner of a family home dies without a will and there is disagreement with surviving family members as to who owns the property.
A party to an action who asserts a claim to real property may record a “notice of pendency of action” (often referred to as a “lis pendens”) with the recorder in each county in which all or part of the real property is located. See California Code of Civil Procedure §405.20
California Real Property Remedies and Damages, CEB, Section 13.4
Chapter 13 of California Real Property Remedies and Damages (KFC 169 A75 C34 2002) provides a comprehensive discussion of procedures and forms involved in lis pendens/notice of pendency of action matters. Included are the rules for who can file a lis pendens. If the signer of the lis pendens is not a licensed attorney, the party acting in pro per must obtain approval of a judge before a lis pendens can be recorded.
If a lis pendens is signed by a party appearing in pro per, approval of the judge of the court in which the action is pending is required before the notice may be recorded. California Code of Civil Procedure §405.21. The statute does not address the procedure for obtaining a judge’s approval of the notice or the means of memorializing such approval. Presumably, the request for approval should be made in the same manner as any other ex parte application. See, e.g., California Rules of Court 3.1200–3.1207. If a claimant appearing in propria persona requests court approval for a proposed notice, the court may approve the notice. California Code of Civil Procedure §405.21.
California Real Property Remedies and Damages, Section 13.32, see also Section 13.116
Here are some other special subject liens that may be seen in public property records–
Tax or assessment liens – Government tax agencies are not subject to the same rules as ordinary citizens.
Workers’ compensation claim – http://www.dir.ca.gov/dwc/iwguides/iwguide10.pdf
Filing a notice and request for allowance of lien is how you make a claim for payment of money you’re owed in a workers’ compensation case. Attached is a lien form. Complete the form. Be sure to sign and date it. This form can also be completed at: http://www.dir.ca.gov/dwc/FORMS/EAMS%20Forms/ADJ/DWCForm6.pdf.
In California, in a marital action, a spouse may file a lien against his or her interest in community real estate to secure payment of attorney fees in the action. The lien affects only the filing spouse’s interest in the property. California Family Code Section 2033.
Child support liens