Answer: Although the builder and/or seller should take care of care of this, there is no guarantee that they will comply. If you contact the lien claimant and they won't voluntarily release the lien or reach a settlement, then you have several other options.
One option would be to purchase a mechanic's lien release bond. Once recorded, the mechanic's lien is automatically released and you would have clear title. Unfortunately, most bonding companies would require cash collateral in addition to the bond premium.
You can also file a petition with the court for removal of the lien. If the mechanic's lien is more than 90 days old and the lien claimant did not file a lawsuit to foreclose on the lien, the lien is null and void under Civil Code § 3144. If you prevail and the Court orders removal of the lien, the Court can also order the lien claimant to reimburse you for up to $2000 in attorney's fees. The Court must hold a hearing within 30 days of the filing date of the petition.
About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.