California Release of Lien
Definition and meaning
A California Release of Lien is a legal document used to formally remove a lien from a property in the state of California. A lien is a legal right or interest that a lender has in the borrower's property, granted until the debt obligation is satisfied. This document is crucial when a debt has been paid, as it provides a clear indication that the lender relinquishes their claim on the property, thus allowing the owner to sell, refinance, or transfer the property without encumbrances.
How to complete a form
Completing a California Release of Lien involves several steps. Follow these instructions to ensure accuracy:
- Identify the lienholder: Fill in the name of the party releasing the lien.
- Specify property details: Enter the property description that the lien was attached to.
- Include recorded information: Provide the document date, recording date, and instrument number.
- Sign the document: Ensure it is signed in front of a notary public.
Double-check all entries for accuracy before submission.
Who should use this form
This form is ideal for property owners and lienholders in California who wish to clear a lien after a debt has been fulfilled. Whether the lien originated from a contractor, a judgment creditor, or a financial institution, this document is necessary to formalize the release and ensure the owner has clear title to their property.
Key components of the form
A completed California Release of Lien should include the following key components:
- The lienholder's name and signature.
- The property’s complete legal description.
- The details of the recorded lien, including dates and instrument numbers.
- A notary acknowledgment to verify the identities of the signing parties.
These components work together to ensure the document is legally valid and enforceable.
What to expect during notarization or witnessing
During the notarization of the California Release of Lien, you will need to present valid identification to the notary public. The notary will confirm your identity and witness you signing the document. They will then complete the notarial certificate, which ensures that the document is legally recognized. It is advisable to sign the document in the presence of the notary to avoid complications later.
Common mistakes to avoid when using this form
When filling out the California Release of Lien, be mindful of these common errors:
- Failure to include all required signatures.
- Incorrect property descriptions.
- Missing notary acknowledgment.
- Not providing accurate recording information.
Review the completed form carefully to ensure all information is correct and complete before submission.
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FAQ
California Civil Code section 8416 Failure to serve the Mechanic's Lien and Notice of Mechanic's Lien on the owner, or alternatively if the owner cannot be served on the lender or direct contractor, shall cause the Mechanic's Lien to be unenforceable as a matter of law (Civil Code Section 8024(d)).
In California, it is required that a mechanics lien be enforced within 90 days from the date on which the lien was recorded. If this 90-day time period passes without an action being commenced to enforce the lien, the lien expires.
From an owner's perspective, a lien is a security interest registered against the title to your property. Any lien placed on the property, even though its validity must be proven in a court of law, will have the power to stop your project.
The cost for these bonds is between 2-3% of the value of the lien inclusive of court costs. So if a mechanics lien is filed for $500,000.
When a lien is bonded off, a payment bond is available to pay off the lien. This provides a guarantee for payment to the construction firm and allows the property owner to be able to sell, finance or transfer the property without fear of a lien on the title.
A lien release is a document that is filed in the public land records as the official notice that the lien is removed. Once payment has been received, a contractor has a duty to remove any lien that was filed against the property.
The bond shall be in an amount equal to 125 percent of the amount of the claim of lien or 125 percent of the amount allocated in the claim of lien to the real property to be released. The bond shall be executed by an admitted surety insurer.
