Source: https://www.gordonrees.com/publications/2015/lien-on-me-mechanical-liens-and-design-professionals-liens
Timestamp: 2019-04-22 10:07:20+00:00

Document:
On July 1, 2012, SB 189, SB 190, AB 456, and SB 424 became effective, revamping California’s Design Professionals Liens and Mechanics Liens statutes. Although it has been a few years since the statutes became effective, this article provides a general overview of the purpose and foundation of these remedies, the process of obtaining them, and the effect of the recent changes.
Once a claim of lien has been recorded, the design professional must file an action to foreclose on the lien within 90 days to avoid the problem of an expired and unenforceable lien. (Civ. Code, § 8306, subd. (b), par. (2).) Also, because the Design Professionals Lien is a remedy for situations where work never commences, the claim of lien expires if the work does commence. (Civ. Code, § 8306, subd. (b), par. (1).) In situations where a lien expires due to work commencing, a design professional may convert his Design Professionals Lien into a Mechanics Lien. (Civ. Code, § 8319.) Moreover, even if a design professional fails in some respect to record a Design Professionals Lien, he may avail himself by obtaining a Mechanics Lien.
If the design professional does not have a direct contractual relationship with the owner of the building, he must give Preliminary Notice to the owner of the building, the direct contractor, and the construction lender, if any. (Civ. Code, § 8200, subd. (a).) The purpose of the Preliminary Notice is to alert the owner of the building that a contractor with whom he does not have a direct contractual relationship is claiming a right to a lien on his property.
The claim of lien may only include work that was included in the direct contract or a modification thereof. (Civ. Code, § 8432, subd. (a).) Thus, even if the work was authorized by a direct contractor or subcontractor, if the work is not authorized by the direct contract, it is not allowed to be included in the claim of lien. Any person who shall willfully include in a claim of lien labor, services, equipment, or materials not furnished for the property described in the claim, shall thereby forfeit the person's lien. (Civ. Code, § 8422, subd. (c).) Therefore, it is important that the claim of lien reflects accurate information.
The benefit of this conversion is that it allows the design professional to maintain a lien on the property without having to give Preliminary Notice to the owner; this eliminates the need to wait 20 days before recording the claim of lien.
SB 189, SB 190, AB 456, and SB 424 became effective on July 1, 2012. These bills made technical and substantive changes to California Design Professionals Lien and Mechanics Lien statutes. The following is an overview of the substantive changes.
Civil Code section 8422 codifies existing case law that holds that errors in a claim of lien (i.e., errors in a claimant’s demand, credits, and offsets deducted; the work provided; or the description of the site) do not invalidate the lien. However, such errors will render the lien invalid if a court determines that: (1) the claim of lien was made with the intent to defraud or slander title; or (2) an innocent third party, without notice, actual or constructive, became the bona fide owner of the property after recordation of the claim of lien, and the claim of lien was so deficient that it did not put the party on further inquiry in any manner.
As set forth above, the law provides design professionals with the additional safeguards in the event of non-payment. Other remedies still remain in place, such as, suing for a breach of contract; however, such a remedy may ultimately fail if the owner of the building does not have the money to pay the judgment. Since the Mechanics Liens and Design Professionals Liens have strict procedural requirements, it is important to understand and adhere to all requirements in order to utilize the benefits of such liens.

References: § 8306
 § 8306
 § 8319
 § 8200
 § 8432
 § 8422