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CAR Opposes Bill That Creates Liens and Clouds Title
C.A.R. is OPPOSING AB 2416 (Stone), a bill that creates a new kind of lien for wage claim disputes.because it denies due process to the owner of the property, and unnecessarily clouds title. The bill was just passed by the Senate Appropriation Committee and could make it to the Senate floor by Monday August 18.
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If your legislator was targeted, you should have received a Red Alert in your email. Please follow the directions in the email to be connected to your senator’s office.
Ask your senator to vote NO on AB 2416.
Background:
Under existing law, trades people and others who have conducted work to improve a property have the right to record a mechanics lien against the property for payment for that work. This bill is not like a mechanics’ lien. Additionally, if an employee has a wage dispute with their employer there are multiple legal remedies available to them to seek fair compensation. This is a new and different remedy.
AB 2416 seeks to create a new wage lien, without the procedural protections of the mechanics lien so that an employee may record a lien against any property owned by the employer, even property that has NO connection to the dispute. The new rule purports to exempt principal residences, but the bill invites “shotgun” recordings that will hit all properties.
Talking Points:
• Property owners are denied due process. AB 2416 allows an employee to record a lien against an employer’s property without adequate notice or opportunity to contest the claim before the lien attaches.
• The bill invites misuse by unscrupulous creditors of an employee. Allowing unscrupulous creditors to take over the employee’s wage claim, without even the need for a garnishment order, invites employees (and property owners) to be victimized twice.
• Innocent property owners are unfairly burdened. The bill allows a lien against commercial property of a landlord whose tenant has a dispute with one of his or her employees.
• AB 2416 allows an employee’s wage dispute to cloud title on ALL property owned by an employer even though the dispute does not involve the property, and even though there has been no hearing on the issue.
• There are already existing legal remedies for wage disputes. Between arbitration, grievance processes, and lawsuits, employees already have sufficient legal options at their disposal to address wage disputes without chilling the availability of mortgage finance and unnecessarily clouding title.
For more information, contact DeAnn Kerr at deannk@car.org or Rian Barrett at rianb@car.org.
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