Insurance & LiensQuestion 84 of 1632

A claimant recorded a mechanics' lien but was paid in full before filing a lawsuit. The claimant must:

a.Leave the lien on the property until the owner sues over it
b.File a notice of completion covering the whole project
c.Record a release of the lien now that it has been paid off
d.Re-record the lien with the amount corrected to zero

Explanation

A lien secures a debt, and once the debt is paid the record should be cleared. The Code's machinery sits in the release-order article: §8482 bars the owner from petitioning for a release order unless, at least 10 days before filing, it gives the claimant notice demanding that the claimant execute and record a release and stating the grounds; §8480(a) then allows the petition once the claimant has let the 90-day enforcement period in §8460(a) run out; and §8488(c) awards reasonable attorney's fees to the prevailing party, which is what makes sitting on a satisfied lien expensive. §8494 adds that an expired or judicially released lien no longer gives constructive notice at all. So (a) is not the free option it looks like. (b) is the owner's document, recorded to shorten the lien deadlines, and it does nothing about a lien already on the record. (d) makes matters worse: re-recording restarts nothing, and a claim of lien stated for an amount no longer owed is the kind of overstatement §8422(c) punishes with forfeiture.

Law Reference: Civil Code §8482; §8480(a); §8488(c); §8460(a); §8494; §8422(c)

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