Contributed By Allen Matkins Leck Gamble Mallory & Natsis LLP
While there are exceptions, all contractors, laborers, designers or those involved in providing goods or labor to the “work of improvement” are permitted to lien the job. The relative priority of liens depends on the circumstances. All mechanics liens relate back to the date the first improvement was done to the property. Usually, the construction loan – the deed of trust securing the construction lender – is recorded prior to the commencement of work. If it is not, then all mechanics liens will be senior to the loan.
Property owners can record a bond of 150% of the amount of a lien claim, and the mechanics liens automatically shift from real property to the bond. Mechanics lien claimants have a claim but, instead of lien against property, they will have lien against the bond.