Lien Laws in California

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A lien allows a creditor to place a hold on property owned by a debtor until the debt is paid. Title 14 of the California Civil Code contains the state’s lien laws. Section 2872 defines a lien as a charge imposed upon specific property as security for the performance of an act. According to Section 2873, liens may be either specific or general. A general lien operates against all of the debtor’s property. A specific lien applies only to property that is the subject of the dispute. Once a lien has been filed, the owner may not sell the property until the dispute has been settled.

Contractual Liens

Section 2881 of the California Civil Code states that a lien may be created by agreement of the parties in a contract. For example, an individual may enter into a contract to sell property to a buyer. The buyer agrees to pay for the property in installments and the seller retains a lien over the property until the full sum has been paid.

Hospital Lien

Section 3045 allows a hospital to place a lien on any damages recovered by an injured person treated by the hospital after an accident caused by the negligence of another party. The hospital’s charges must be reasonable and necessary. For the lien to be effective, the hospital must serve a written notice on the party at fault specifying the details of the accident, the name of the hospital, and the charges incurred. The hospital must also inform any relevant insurers of its lien.

Mechanic's Lien

Not just for mechanics, any contractor or sub-contractor may file a Mechanic’s Lien on a property if they do not receive payment for work done. The lien is to the value of the materials and labor expended by the contractor or sub-contractor. To take effect, the contractor must file the lien with the county recorder’s office in the county where the property is situated. Section 3084 of the California Civil Code states that anyone filing a Mechanic’s Lien must also serve notice of the lien to the owner of the affected property. Service can be by registered mail, certified mail or first-class mail.

Livestock Service Lien

Section 3080 of the California Civil Code sets out the law regarding livestock service liens. A livestock servicer, for example the owner of a stable, has a general lien on all livestock in his possession to ensure that the owner of the livestock pays his bills. The definition of livestock includes cattle, sheep and horses. If the livestock owner does not pay the sums due, the livestock servicer may file a civil lawsuit and eventually force the sale of the livestock.

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