AB 534 (Gallagher). Common interest developments: mechanics liens.

Justice for Workers

Would prohibit a mechanics lien from being filed against an other owner in the common interest development unless consent was provided or a request was made, except in the case of emergency repairs. Would deem the association to be an agent of the owners of separate interests in the common interest development with respect to work on a common area.

Current Status: Pending

FindHOALaw Quick Summary:

The California Constitution establishes a lien upon a property for the value of labor and materials for work completed on that property.  In a condominium project, the Davis-Stirling Act and the Commercial and Industrial Common Interest Development Act prohibit a mechanics lien for work completed at the request of an owner, from being filed against any other property of any other owner unless that owner expressly consented to or requested the work to be completed, except in the case of emergency repairs.  An owner may remove his or her condominium from a lien against two or more units by paying to the lienholder the prorated share that is attributable to that owner’s  unit, or recording a lien release bond in an amount equal to 125% of the sum secured by the lien that is attributable to that owner’s unit. This bill would amend Civil Code Sections 4615 and 6658 to apply to all common interest developments and their separate interests.

Work performed on the common area, if authorized by the association, would be deemed to have been performed with the express consent of the owners of the separate interests.  This bill would add Civil Code Sections 4620 and 6660 to require the association give individual notice to the membership of a claim of lien within 60 days of service.

Finally, this bill would add Civil Code Section 8119 to provide that the association is deemed to be an agent of the owners of the separate interests for work performed on the common area for purposes of delivery or service of a notice of claim.

**UPDATE: On April 5, 2017, the proposed text of AB 534 was amended to change condominium project to common interest development, and to change condominium to separate interest:

(a) In a condominium project, common interest development, no labor performed or services or materials furnished with the consent of, or at the request of, an owner in the condominium project common interest development or the owners’ agent or contractor shall be the basis for the filing of a lien against any other property of any an other owner in the condominium project common interest development unless that other owner has expressly consented to or requested the performance of the labor or furnishing of the materials or services. However, express consent shall be deemed to have been given by the owner of any condominium separate interest in the case of emergency repairs thereto.
(b) Labor performed or services or materials furnished for the common area, if duly authorized by the association, shall be deemed to be performed or furnished with the express consent of each condominium separate interest owner.
(c) The owner of any condominium separate interest may remove that owner’s condominium separate interest from a lien against two or more condominiums separate interests or any part thereof by payment doing either of the following:
(1) Pay to the holder of the lien of the fraction of the total sum secured by the lien that is attributable to the owner’s condominium. separate interest.
(2) Record a lien release bond, pursuant to Section 8424, in an amount equal to 125 percent of the sum secured by the lien that is attributable to the owner’s separate interest.
**UPDATE: On April 6, 2017, the proposed text of AB 534 was amended to limit the requirements for notice to the membership:
 4620. If the association is served with a claim of lien pursuant to Part 6 (commencing with Section 8000), 8000) for a work of improvement on a common area, the association shall, within 60 days of service, give individual notice to the members, pursuant to Section 4040.

To read the current text of AB 534, click here to the view the bill’s page on the California Legislature’s website. FindHOALaw will continue to track AB 534 as it progresses through the Legislature. 

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from the California Legislature's website