There remain some issues under the new law that existed under the old law. For example, the new statutory waiver and release forms still exclude “extras” from the scope of the waiver and release. This may benefit a contractor who characterizes certain costs as “extras” and then argues a lien to continue to exist even after an effective waiver and release.

The old and new provisions for an expedited judicial proceeding to release a lien are limited to situations where the contractor has not timely commenced an action to enforce the lien and the remedy is limited to owners. However, there is no longer a $2,000 cap on recoverable attorneys’ fees. California case law recognizes a right to challenge mechanics liens on other grounds, either by a separate legal proceeding or by way of a motion in an action to enforce a mechanics lien. However, a recent case held that construction lenders do not have that right. The new mechanics lien law could have provided a broader right to expedited legal proceedings to challenge the validity or amount of a mechanics lien.

Q: Will there likely be other changes to the mechanics lien law?

A: Given its importance to the construction industry and its history, undoubtedly yes.

Jeffrey A. Sykes is a Construction Law Partner at Farella Braun + Martel LLP in San Francisco.