Section § 1203.50

Explanation

This section states the official name of this chapter, which is the Oil and Gas Lien Act.

This chapter shall be known and may be cited as the Oil and Gas Lien Act.

Section § 1203.51

Explanation

This section defines key terms used in a particular legal chapter related to oil and gas leases. It explains who or what is considered a 'person', 'owner', and 'contract', among others. For example, 'owner' refers to anyone with an interest in an oil or gas lease, and 'contract' can refer to any type of agreement, whether written, oral, or implied. Also defined are terms like 'material', 'labor', 'services', and 'drilling', each with specific meanings relating to operations on the lease.

Unless the context otherwise requires, the definitions set forth in this section shall govern the construction of this chapter.
(a)CA Civil Procedure Code § 1203.51(a) “Person” means an individual, corporation, firm, partnership, limited liability company, or association.
(b)CA Civil Procedure Code § 1203.51(b) “Owner” means a person holding any interest in the legal or equitable title or both to any leasehold for oil or gas purposes, or his or her agent and shall include purchasers under executory contract, receivers, and trustees.
(c)CA Civil Procedure Code § 1203.51(c) “Contract” means a contract, written or oral, express or implied, or partly express and partly implied, or executory or executed, or partly executory and partly executed.
(d)CA Civil Procedure Code § 1203.51(d) “Material” means any material, machinery, appliances, buildings, structures, casing, tanks, pipelines, tools, bits, or other equipment or supplies but does not include rigs or hoists or their integral component parts except wire lines.
(e)CA Civil Procedure Code § 1203.51(e) “Labor” means work performed in return for wages.
(f)CA Civil Procedure Code § 1203.51(f) “Services” means work performed exclusive of labor, including the hauling of material, whether or not involving the furnishing of material.
(g)CA Civil Procedure Code § 1203.51(g) “Furnish” means sell or rent.
(h)CA Civil Procedure Code § 1203.51(h) “Drilling” means drilling, digging, shooting, torpedoing, perforating, fracturing, testing, logging, acidizing, cementing, completing or repairing.
(i)CA Civil Procedure Code § 1203.51(i) “Operating” means all operations conducted on the lease in connection with or necessary to the production of oil or gas, either in the development thereof or in working thereon by the subtractive process.
(j)CA Civil Procedure Code § 1203.51(j) “Construction” means construction, maintenance, operation, or repair, either in the development thereof or in working thereon by the subtractive process.
(k)CA Civil Procedure Code § 1203.51(k) “Original contractor” means any person for whose benefit a lien is prescribed under Section 1203.52.

Section § 1203.52

Explanation

If you work under contract to provide labor, materials, or services for an oil or gas lease, you can file a claim for a lien to ensure you get paid. This claim applies even if the well isn't producing or the materials aren't part of the final well. You must file this claim within six months of when you provided the work or materials. You can also include costs like shipping and interest in your claim.

Any person who shall, under contract with the owner of any leasehold for oil or gas purposes perform any labor or furnish any material or services used or employed, or furnished to be used or employed in the drilling or operating of any oil or gas well upon such leasehold, or in the constructing, putting together, or repairing of any material so used or employed, or furnished to be so used or employed, shall be entitled to a lien under this chapter, whether or not a producing well is obtained and whether or not such material is incorporated in or becomes a part of the completed oil or gas well, for the amount due him for any such labor performed, or materials or services furnished, within six months prior to the date of recording the statement of lien as provided in Section 1203.58, including, without limitation, shipping and mileage charges connected therewith, and interest from the date the same was due.

Section § 1203.53

Explanation

This law explains what property a lien, related to oil or gas leaseholds, can apply to. It includes the rights over the leasehold where the work was done, without affecting prior royalty interests and similar claims. It also covers materials and fixtures used for drilling or operating wells, as well as the wells themselves and the oil or gas produced, excluding interests owned by others as specified before the work began.

Liens created under Section 1203.52 shall extend to:
(a)CA Civil Procedure Code § 1203.53(a) The leasehold for oil or gas purposes to which the materials or services were furnished, or for which the labor was performed, and the appurtenances thereunto belonging, exclusive of any and all royalty interest, overriding interests and production payments created by an instrument recorded prior to the date such materials or services were first furnished or such labor was first performed for which lien is claimed; and
(b)CA Civil Procedure Code § 1203.53(b) All materials and fixtures owned by the owner or owners of such leasehold and used or employed, or furnished to be used or employed in the drilling or operating of any oil or gas well located thereon; and
(c)CA Civil Procedure Code § 1203.53(c) All oil or gas wells located on such leasehold, and the oil or gas produced therefrom, and the proceeds thereof, except the interest therein owned by the owners of royalty interests, overriding royalty interests and production payments created by an instrument recorded prior to the date such materials or services were first furnished or such labor was first performed for which the lien is claimed.

Section § 1203.54

Explanation

If you work as a subcontractor, doing labor or providing materials or services for an original contractor, you can claim a lien. This means you have a legal claim to the property where you've done the work, similar to the original contractor. This also applies to materials and fixtures used in oil or gas well projects.

Any person who shall, under contract, perform any labor or furnish any material or services as a subcontractor under an original contractor or for or to an original contractor or a subcontractor under an original contractor, shall be entitled to a lien upon all the property upon which the lien of an original contactor may attach to the same extent as an original contractor, and the lien provided for in this section shall further extend and attach to all materials and fixtures owned by such original contractor or subcontractor to or for whom the labor is performed or material or services furnished and used or employed, or furnished to be used or employed in the drilling or operating of such oil or gas wells.

Section § 1203.55

Explanation

This section states that if a lien (a legal claim on property) is attached to a leased property and the lease is forfeited, the lien still remains valid for any materials, fixtures, or improvements made before the lease was forfeited. Similarly, if the lien is attached to an interest that hasn't become full legal ownership or depends on a condition that hasn't happened yet, the lien remains valid for the materials and fixtures if they were attached before the issue.

When a lien provided for in this chapter shall have attached to a leasehold estate, forfeiture of such estate shall not impair any lien as to material, appurtenances and fixtures located thereon and to which such lien has attached prior to forfeiture. If a lien provided for in this chapter attaches to an equitable interest or to a legal interest contingent upon the happening of a condition subsequent, failure of such interest to ripen into legal title or such condition subsequent to be fulfilled, shall not impair any such lien as to material, appurtenances and fixtures located thereon and to which said lien had attached prior to such failure.

Section § 1203.56

Explanation

This law explains when a lien (a legal claim on property as security for a debt) starts and how it takes priority over other claims. The lien begins the day materials or services are first provided or labor is first performed on your property. If you follow the specific requirements in Section 1203.58, this lien will take precedence over any other claims or liens that are placed on your property after the original lien started.

The lien provided for in this chapter arises on the date of the furnishing of the first item of material or services or the date of performance of the first labor for which a lien is claimed under the provisions of this chapter. Upon compliance with the provisions of Section 1203.58, such lien shall be preferred to all other titles, charges, liens or encumbrances which may attach to or upon any of the property upon which a lien is given by this chapter subsequent to the date the lien herein provided for arises.

Section § 1203.57

Explanation
This law states that when multiple claims (liens) are made on the same property under this chapter, they are treated equally, except for claims made by those who performed labor on the property. These labor-related claims are given priority over all others.
All liens arising by virtue of this chapter upon the same property shall be of equal standing except that liens of persons for the performance of labor shall be preferred to all other liens arising by virtue of this chapter.

Section § 1203.58

Explanation

If you want to claim a lien (which is like a legal claim on a property for money owed), you need to record a detailed statement at the county recorder's office where the property is located. This statement should include the amount you're claiming and the details of the labor or materials you provided. It must also list the property owner, your name and address, and if applicable, who directly received your services. Importantly, you have six months from the date the work was done to file this document to make sure it's valid.

Every person claiming a lien under this chapter, shall record in the office of the county recorder for the county in which such leasehold, or some part thereof, is situated, a verified statement setting forth the amount claimed and the items thereof, the dates on which labor was performed or material or services furnished, the name of the owner of the leasehold, if known, the name of the claimant and his mailing address, a description of the leasehold, and if the claimant be a claimant under Section 1203.54, the name of the person for whom the labor was immediately performed or the material or services were immediately furnished. The statement of lien must be recorded within six months after the date on which the claimant’s labor was performed or his materials or services were furnished to be effective as to such labor, materials, or services.

Section § 1203.59

Explanation

This law says that if someone claims a lien (a legal claim) on oil or gas, it doesn't affect a buyer until they get a written notice. The notice has to include the claimant's details, the lien amount, and a description of the property. The buyer must get the notice in person or through certified mail and then hold onto the payment for the oil or gas up to the lien amount until they get written proof that the claim has been settled. The person claiming the lien must inform the buyer within 10 days that the lien has been paid off.

Anything in this chapter to the contrary notwithstanding, any lien claimed by virtue of this chapter, insofar as it may extend to oil or gas or the proceeds of the sale of oil or gas, shall not be effective against any purchaser of such oil or gas until written notice of such claim has been delivered to such purchaser. Such notice shall state the name of the claimant, his address, the amount for which the lien is claimed, and a description of the leasehold upon which the lien is claimed. Such notice shall be delivered personally to the purchaser or by registered letter or certified mail. Upon receipt of such notice the purchaser shall withhold payments for such oil or gas runs to the extent of the lien amount claimed until delivery of notice in writing that the claim has been paid. The funds so withheld by the purchaser shall be used in payment of the lien judgment upon foreclosure. The lien claimant shall within 10 days give notice in writing that the claim has been paid.

Section § 1203.60

Explanation

If someone has filed a lien on property, the owner, lessor, or involved contractor can record a bond instead. This bond should cover 150% of the lien's value and be payable to the lienholder. It must be signed by the property owner and backed by a surety company. Once recorded, this bond acts as a substitute for the property in question in legal claims. Lienholders have a certain time to sue on this bond, and multiple claims can be made separately.

(a)CA Civil Procedure Code § 1203.60(a) Whenever any lien or liens shall be claimed or recorded under the provisions of this chapter then the lessor or owner of the property on which the lien or liens are claimed or the contractor or subcontractor through whom such lien or liens are claimed, or either of them, may record a bond with the county recorder of the county in which the property is located as herein provided. Such bond shall describe the property on which lien or liens are claimed, shall refer to the lien or liens claimed in manner sufficient to identify them and shall be in an amount equal to 150 percent of the amount of the claimed lien or liens referred to and shall be payable to the party or parties claiming same. Such bond shall be executed by the party recording same as principal and by a corporate surety authorized to execute such bonds as surety and shall be conditioned substantially that the principal and surety will pay to the obligees named or their assigns the amounts of the liens so claimed by them with all costs in the event same shall be proven to be liens on such property.
(b)CA Civil Procedure Code § 1203.60(b) Such bond, when recorded, shall take the place of the property against which any claim for lien referred to in such bond is asserted. At any time within the period of time provided in Section 1203.61, any person claiming such lien may sue upon such bond but no action shall be brought upon such bond after the expiration of such period. One action upon such bond shall not exhaust the remedies thereon but each obligee or assignee of an obligee named therein may maintain a separate suit thereon in any court having jurisdiction.

Section § 1203.61

Explanation

This law explains how liens should be enforced. You need to start legal action to enforce a lien within 180 days of recording it. If you give credit and document it within that period, the lien can last until 180 days after the credit ends, but no longer than a year after completing work. If you don’t take the lien to trial within two years, the court might dismiss it. If the case is dismissed or it's ruled that no lien exists, it's like the lien was never there. For anyone who buys the property or takes out a loan on it after the 180 days, any credit or lien extension won’t work unless it was officially recorded before the buyer or lender’s rights were established.

(a)CA Civil Procedure Code § 1203.61(a) Any lien provided for by this chapter shall be enforced in the same manner as provided in Chapter 4 (commencing with Section 8400) of Title 2 of Part 6 of Division 4 of the Civil Code. The action shall be filed within 180 days from the time of the recording of the lien. If a credit is given and notice of the fact and terms of the credit is filed in the office of the county recorder subsequent to the filing of the lien and prior to the expiration of the 180-day period, then the lien continues in force until 180 days after the expiration of the credit, but no lien continues in force by reason of any agreement to give credit for a longer time than one year from the time the work is completed. If the proceedings to enforce the lien are not prosecuted to trial within two years after commencement, the court may in its discretion dismiss the action for want of prosecution, and in all cases the dismissal of the action (unless it is expressly stated that it is without prejudice) or a judgment in the action that no lien exists is equivalent to the cancellation and removal from the record of the lien.
(b)CA Civil Procedure Code § 1203.61(b) As against any purchaser or encumbrancer for value and in good faith whose rights are acquired subsequent to the expiration of the 180-day period following the filing of the lien, no giving of credit or extension of the lien or time to enforce the lien shall be effective unless evidenced by a notice or agreement filed for record in the office of the county recorder prior to the acquisition of the rights of the purchaser or encumbrancer.

Section § 1203.62

Explanation

This law says that nothing in this chapter will take away or change the right of someone who is owed money for work, materials, or services to take legal action against the person who owes them.

Nothing in this chapter shall be construed to impair or affect the right of any person to whom any debt may be due for work performed or materials or services furnished to maintain a personal action against the person liable for such debt.

Section § 1203.63

Explanation

This law states that if a person takes a note or additional security, it doesn't automatically cancel the lien they have unless both parties clearly agree in writing that it does. Similarly, if someone claims a lien, it doesn’t automatically give up any other rights or security they may have unless stated otherwise in writing by the parties involved.

The taking of any note or any additional security by any person given a lien by this chapter shall not constitute a waiver of the lien given by this chapter unless made a waiver by express agreement of the parties in writing. The claiming of a lien under this chapter shall not constitute a waiver of any other right or security held by the claimant unless made a waiver by express agreement of the parties in writing.

Section § 1203.64

Explanation

This section explains that if you have a claim for a lien (a legal right to keep someone's property until they pay a debt), you can transfer that claim to someone else (this is called 'assigning'). When you transfer it, the person you give it to gets all the rights you had. However, if there are any legal defenses against the claim, those defenses still apply to the new owner of the claim.

All claims for liens and likewise all actions to recover therefor under this chapter shall be assignable upon compliance with the provisions of Section 1203.58 so as to vest in the assignee all rights and remedies herein given subject to all defenses thereto that might be raised if such assignments had not been made.

Section § 1203.65

Explanation

This law explains how liens, which are claims on property to secure a debt, are to be perfected (properly filed and made official) and enforced both before and after the new rules in this chapter took effect. If you have a lien from before these rules, it needs to follow the new processes outlined here. If it wasn't perfected under old laws, you have some extra time to perfect it under the new regulations. For liens perfected under old rules, their validity is judged by the old rules, but enforcing them should follow the new guidelines as much as possible.

All liens granted by this chapter shall be perfected and enforced in accordance with the provisions hereof whether such liens arise before or after the effective date of this chapter; provided, however, that any unperfected lien granted under any statute in effect prior to the effective date of this chapter and which could be subsequently perfected in accordance with such prior statute were it not for the existence of this chapter may be perfected and enforced in accordance with the provisions of this chapter if the statement of lien required to be recorded under Section 1203.58 is recorded within the time therein required or within two months after the effective date of this chapter, whichever period is longer; and provided further, that the validity of any lien perfected prior to the effective date of this chapter in accordance with the requirements of any statute in effect prior to such effective date shall be determined on the basis of such prior statute but the enforcement thereof shall insofar as possible be governed by the provisions of this chapter.

Section § 1203.66

Explanation

This law says that when interpreting this chapter, it should be done generously in support of anyone who has a right to a lien under these rules.

This chapter shall be given liberal construction in favor of all persons entitled to any lien under it.