California Real Estate SalespersonProperty Ownership and Land Use ControlsHard
A contractor begins visible grading work on a construction site on March 1. The lender records a construction loan deed of trust on March 15, before framing begins. The contractor is not paid and records a mechanic's lien on June 1. Which statement about lien priority is correct?
- APriority is determined by whichever lien amount is larger
- BThe mechanic's lien and the deed of trust have equal priority and are paid pro rata
- CThe mechanic's lien has priority because it relates back to the date visible work began, March 1
- DThe lender's deed of trust has priority because it was recorded first
Show answer & explanationAnswer & explanation
Correct answer: C. The mechanic's lien has priority because it relates back to the date visible work began, March 1
California mechanic's lien priority relates back to the date construction work visibly commenced on the site, not the date the lien was actually recorded; because grading began March 1, before the deed of trust was recorded on March 15, the mechanic's lien takes priority over the later-recorded loan.
Why the other options are wrong
- A. Lien priority is based on timing and relation-back rules, not the dollar amount of each lien.
- B. There is no pro rata rule; priority is determined by recording date versus the relation-back date of commencement of work.
- D. Although recorded earlier, the deed of trust is junior because mechanic's lien priority relates back to the start of visible construction.
Mechanic's Lien Relation-Back Doctrine
A mechanic's lien's priority dates back to the commencement of visible construction work on the property, even though the lien itself is recorded much later.
- Priority relates back to the date work was first visible on site, not the recording date
- This can give unpaid contractors priority over later-recorded construction loans
- Contractors must record the lien within statutory deadlines after completion
Memory trick: The shovel hits dirt first — that's when the lien clock really starts.