You filed a lien, your late-to-pay customer responded, and now your balance is paid up. You’re ready to move onto the next batch of projects. However, there’s one last step – a release of mechanics lien.
Avoid potential penalties – and ensure your business does its part – by removing the lien on that property.
Whenever you file a mechanics lien with CNS, a free lien release form is included. Your team can complete that paperwork, or you can skip worrying about it, and call on CNS to take care of it.
By the way, we have another freebie for CNS customers: Free lien waiver forms.
Take care of your final release of a lien, and continue reading to understand the rules for the states we serve.
What’s a Release of Mechanics Lien – and Why Do I Need One?
A release of mechanics lien is an official legal document that’s recorded with the county. The release states that the claim has been fully paid/satisfied, and the lien is removed from the property. Learn about four varieties of waivers and releases.
Once your outstanding balance has been paid in full, you should – or need to – release the lien. This helps you avoid potential repercussions from your state or legal action from the customer.
Arizona Lien Release
If you’ve recorded a lien in Arizona, the lien claimant (you or your business) must remove the lien within 20 days after your customer has paid the balance.
Otherwise, you can be held liable for actual damages and $1,000.00. View the Arizona Revised Statues here.
California Release of Lien
In contrast to Arizona and Nevada, California has no statutory time frame or penalty if you fail to release the lien.
That said, if a lien is expired or has been satisfied/paid, the owner may petition the courts to have the lien removed, and the lien claimant may be subject to attorney fees. In this case, your business could encounter unexpected costs from this situation. View the California Civil Code here.
Additionally, in this article from Porter Law Group, you can learn more about a real-world example of the complications that an unreleased lien in California can create.
Lien Release Nevada
After the amount in question is paid up, the lien on your customer must be released within 10 days. Or, the lien claimant may be liable for any damages caused or $100.00, whichever is greater. View the Nevada Revised Statutes.
Lien Release Washington State
According to Washington state law, once the lien has been paid up, the claimant must immediately prepare and release the lien. Otherwise, you risk paying for court costs, attorneys’ fees, and any damages. View the Washington Revenue Code.
Oregon Lien Release
When your customer has paid what was owed, and you’ve gotten a written request for the lien cancellation, you must release the lien within 10 days. However, if that lien isn’t released, you might owe actual damages or $500, whichever is greater. View the Oregon Revised Statutes.
Please Note: New Mexico is another state we serve, yet we only handle preliminary notices there. Log into your customer portal – or register for a new account – to get your next prelim in NM started.
Call on CNS this Holiday Season
If you’re busy making a list and checking it twice, ask CNS to help take a task off your business’ to-do list this December.
To get your accounts prepared for 2021, we can assist you with recording mechanics liens, releasing paid-up liens, and more.
Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.