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California Design Professionals Liens

Updated: Feb 19

California law authorizes mechanics liens for labor and materials provided after a work of improvement begins. But what about those professionals involved prior to the first shovel in the ground?


Enter the California design professionals lien (“DPL”). Certain “design professionals” are entitled to record a particularized lien for work done in preparing for the project.


Who is a "design professional"?


A "design professional" in California is a licensed architect, landscape architect, professional engineer, or land surveyor performing services on a work of improvement pursuant to a written contract with a landowner.


So California law only considers those four licensed professions to be "design professionals." Cal. Civ. Code section 8014. While another trade might technically be a “design professional” in colloquial terms, these four are the only kinds of “design professionals” entitled to a DPL.

The "design professional" must also be providing services pursuant to a written contract with a landowner for the design, engineering, or planning of a work of improvement. Cal. Civ. Code section 8300.


Conditions for a DPL


The following conditions must be satisfied:

  1. The work of improvement has not yet commenced;

  2. The landowner fails to pay the design professional when payment is due;

  3. The design professional demands payment; and

  4. 10 days after demanding payment, the design professional records a claim of lien.

All four of these conditions must be satisfied for the DPL to be effective.


When Does the Lien Attach?


"Attachment" refers to the lien actually applying to the property, and is important for determining the priority of liens (when they get paid).


DPLs attach on the date the lien is recorded. Cal. Civ. Code section 8302(a). This is different from mechanics liens, which attach on the date the work of improvement commences, no matter when the lien is actually recorded. Cal. Civ. Code section 8450(a).


When is a DPL not available?


A DPL might not be available in all cases. In addition to satisfying the four requirements listed above, DPLs must be recorded before the work of improvement begins, the design professional must file a lawsuit within 90 days of recording the claim of lien, and it must be recorded within 90 days of the design professional's discovery or reasonable suspicion that the work of improvement will not commence.


What are the downsides?


DPLs are very limited. They are only available to these four specific, listed types of design professionals. The time period in which they're available is very short. In all practical terms, a DPL might be available only for a few days, if at all. Because of this narrow availability, many design professionals prefer to rely on mechanics liens instead.


So why wouldn't I just record a mechanic's lien instead?


Mechanic's liens are not available until the project has begun. Until the first shovel goes into the ground, you have no right to a mechanic's lien. DPLs also have higher priority. That means, all things being equal, they would be paid prior to the mechanics liens. Mechanics liens, no matter the date on which they're recorded, all attach at the same time: the date the work commences.


And the threat of a DPL might also be enough to force payment. Developers do not want liens on a development, especially before the project has even begun. And it's obvious why: before a single contractor is on site, the developer already has payment issues.


A contractor can wait for the project to begin, but if you have already recorded a DPL, you can convert the DPL into a mechanic's lien.


How do I convert a DPL into a mechanic's lien?


Conversion requires all of the following:

  1. The DPL has expired because the work has commenced;

  2. The DPL remains unpaid;

  3. The design professional records a mechanic's lien within 30 days of commencement; and

  4. The mechanic's lien states that it is a converted DPL.

Unfortunately, attachment is on the date of commencement, no longer the earlier priority of the DPL. But you retain your right to a lien.


Conclusion


DPLs are a useful, albeit limited, tool for design professionals. The threat is often enough to force payment, but the timelines for enforcement are even tighter (at least practically if not legally) than for mechanic's liens. If you are one of the four design professionals, familiarize yourself with these statutes, and consider making these a part of your usual practice.

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