Nondisclosure & Fraud  ·  October 3, 2026

Someone Filed a Bogus Lien or UCC Filing Against You. What Does California's AB 501 Change?

You run a title report before a refinance and find a "lien" you have never seen, recorded by a former contractor, an ex-business partner, or a stranger who claims you owe him millions under a theory no court has ever accepted. Or your bank flags a UCC financing statement filed with the Secretary of State naming you as a "debtor" to someone you have never borrowed from. Either way, the filing sits in a public index, it can stall a sale or loan, and the person who filed it may have spent nothing to put it there.

California has had a statute aimed at knowingly false liens and lawsuits for years: Code of Civil Procedure Section 765.010 and the sections that follow it. On September 27, 2026, the Governor approved Assembly Bill 501 (Papan), Chapter 505, Statutes of 2026, which amends that statute and adds new Commercial Code procedures directed at false UCC financing statements. This article walks through what the chaptered text actually does, who it protects, what it does not do, and how it fits with the remedies a California property owner already has.

A threshold point on scope: most of AB 501's new machinery is about UCC financing statements, the filings secured lenders use to give notice of a security interest in personal property. Its main change for false real property recordings is the higher penalty, though a UCC fixture filing recorded with the county is a financing statement and appears to fall within the new affidavit procedure. If your problem is a recorded mechanics lien or a notice of pending action (lis pendens), the older, instrument-specific remedies discussed below remain the main tools.

When does AB 501 take effect?

The chaptered bill contains no urgency clause, operative date, or sunset provision. Under Article IV, Section 8(c)(1) of the California Constitution, a statute enacted at a regular session goes into effect on January 1 following a 90-day period from enactment. For a bill approved on September 27, 2026, that is January 1, 2027.

Because the law is new, there is no appellate case law interpreting the amended provisions yet. Several questions flagged below are open, and courts will answer them over time.

What did California law already prohibit before AB 501?

Code of Civil Procedure Section 765.010 sits in the quiet title chapter of the Code of Civil Procedure, in an article titled "Liens and Encumbrances." Since 2016 (Stats. 2015, ch. 208, AB 1267), subdivision (b) has prohibited a person from filing or recording, or directing another to file or record, "a lawsuit, lien, or other encumbrance, including a notice of lis pendens, against another person or entity knowing it is false, with the intent to harass the person or entity or to influence or hinder the person in discharging his or her official duties if the person is a public officer or employee."

Two features of that language matter.

First, the protection is not limited to public officials. The prohibition covers filings "against another person or entity." The public-officer language applies only to the second alternative intent, influencing or hindering official duties. A private homeowner or business is protected if the filer acted with the intent to harass.

Second, the intent element is demanding. The filer must know the filing is false, and must act with intent to harass (or, for a public officer or employee, intent to influence or hinder official duties). "Harass" is defined in Section 765.010(a)(1) as "knowing and willful conduct that serves no legitimate purpose." A contractor who records a lien over a genuine payment dispute, even a weak one, is not obviously within this statute. It is aimed at filings the filer knows are baseless.

The existing procedure works like this:

• Petition. The affected person or entity petitions the superior court for an order, which may be granted ex parte, directing the claimant to appear and show cause why the lien or encumbrance should not be stricken (Code Civ. Proc. Sec. 765.010(c)(1)). The hearing may be set no earlier than 14 days after the date of the order (Sec. 765.010(c)(2)). The petition must be supported by an affidavit and be in substantially the form prescribed by the Judicial Council (Sec. 765.020).
• Order. If the court finds a violation, it "shall issue an order striking and releasing the lien or other encumbrance" and may award costs and reasonable attorney's fees to the petitioner. If the court finds the lien valid, it may award fees the other way, to the claimant (Sec. 765.030). The court may direct that its order be recorded.
• Penalty. Before AB 501, Section 765.040 made a violating claimant liable for a civil penalty of up to $5,000.
• Exclusions. The article does not apply to a document that acts as a claim of encumbrance by a financial institution, as defined in Penal Code Section 14161(a) or Code of Civil Procedure Section 481.113, or by a public entity (Sec. 765.050).

What does AB 501 change?

The chaptered bill amends two Code of Civil Procedure sections and adds or amends three Commercial Code sections.

The penalty rises to $15,000, but only for knowingly false filings made with the required intent

As amended, Section 765.040 provides that a claimant who records or files a lawsuit, lien, or other encumbrance "in violation of paragraph (1) of subdivision (b) of Section 765.010" is liable "to the person subject to the lawsuit or the owner of the property bound by the lien or other encumbrance for a civil penalty of up to fifteen thousand dollars ($15,000)."

Three qualifiers in that sentence are easy to lose:

• "Up to." $15,000 is a ceiling, not an automatic award.
• Paragraph (1) only. The penalty attaches to the knowing-and-harassing prohibition in Section 765.010(b)(1). It does not, by its terms, attach to the new financing statement prohibition in paragraph (2), discussed next.
• Per filing is unresolved. The statute does not say whether the penalty is assessed per filing or per case. A claimant who records several bogus instruments may argue for one penalty. No court has addressed that under the amended text.

The penalty provision is not limited to UCC filings, so it applies to false real property recordings that meet the paragraph (1) standard.

"Lien" now includes UCC financing statements

AB 501 adds Section 765.010(a)(3): "'Lien' includes a financing statement, as defined in Section 9102 of the Commercial Code." A knowingly false UCC filing made with intent to harass can therefore be attacked under the same petition-and-strike procedure, and, because the penalty provision is keyed to violations of Section 765.010(b)(1), can carry the $15,000 maximum penalty.

A new, lower standard for financing statements

New Section 765.010(b)(2) provides: "A person shall not file, or direct another to file, a financing statement for which no reasonable basis or legal cause exists."

This paragraph has no knowledge or intent element. It applies only to financing statements (including fixture filings recorded with the county), not to other recorded real property liens, lawsuits, or lis pendens. As noted above, the Section 765.040 penalty is tied to paragraph (1), so a paragraph (2) violation does not, on the face of the statute, carry the civil penalty. It does support the strike-and-release order and discretionary fee award under Section 765.030, which apply to a lien "in violation of Section 765.010," and it is one ground for the new Commercial Code affidavit described below.

Venue and who may petition

Amended Section 765.010(c)(1) now lets a person or entity whose property is subject to a lien or encumbrance, "or who is named in a lawsuit, financing statement, or notice of lis pendens in violation of this section," petition the superior court of the county where the person or entity resides, where the financing statement was filed, or where the property is located.

Secretary of State notice to debtors

New Commercial Code Section 9529 provides: "The Secretary of State shall notify the debtor named in the financing statement within 21 days after the financing statement is filed." The statute does not specify business days, and it does not specify the method of notice or the address used.

Two cautions. First, fixture filings and filings covering as-extracted collateral or timber to be cut go to the county office where a mortgage on the related real property would be recorded, not the Secretary of State (Com. Code Sec. 9501(a)(1)). Section 9529 does not, on its face, impose a notice duty on county recorders. Second, do not treat the absence of a notice as proof that nothing has been filed against you; run your own search.

The debtor affidavit and automatic termination

New Commercial Code Section 9513.1 is the most significant procedural change. Under subdivision (a), a person identified as a debtor in a financing statement, or a person who reasonably appears to be the intended debtor (including where the filing uses a trade name, fictitious business name, former name, misspelling, or truncation), may file an affidavit under penalty of perjury with the filing office where the statement was filed. The affidavit is available where the financing statement either was not permitted to be filed under Commercial Code Section 9509 (generally, filed without the debtor's authorization; signing a security agreement is one common way a debtor gives that authorization) or was filed in violation of Code of Civil Procedure Section 765.010(b).

How it works:

• Form and rejection. The Secretary of State must make a form affidavit available. The filing office must reject an affidavit that is incomplete or that targets a financing statement covered by the exclusions in subdivision (i) (Sec. 9513.1(a)).
• 30-day hold. "Following acceptance of an affidavit properly filed under subdivision (a), the filing office shall hold the affidavit in abeyance for 30 days" (Sec. 9513.1(b)). If the filing office has not received a court order enjoining the filing by the end of that period, it then files a termination statement, which is effective immediately on filing, indicates it was filed under Section 9513.1, and includes a copy of the affidavit.
• Notice to the secured party. Immediately upon accepting the affidavit, the filing office must send notice of the pending termination to each secured party of record (Sec. 9513.1(c)).
• Secured party's challenge. A secured party of record may petition the superior court (in the county where the filing office is located or where the secured party resides or has its principal place of business) for preliminary injunctive relief to stop the termination and for an order requiring the affiant to appear at a hearing. The hearing may be set no earlier than 14 days after the order. Subdivision (d) states: "An action under this subdivision must be brought not later than the 90th day after the date on which the termination statement is filed." So a termination under this section can still be undone by court order for a period after it is filed; do not assume the matter is closed when the termination statement appears.
• If you do not show up. If the affiant fails to appear after proper service, and on a prima facie showing by the petitioner, the court may deem the financing statement valid (Sec. 9513.1(e)).
• Fees run both ways. If the court finds the financing statement invalid, it may award costs and reasonable attorney's fees to the affiant. If it finds the statement valid, it may award costs and fees to the secured party against the affiant and, if it also finds the affidavit was made in bad faith, actual damages to the secured party and a civil penalty of up to $5,000 against the affiant (Sec. 9513.1(e)).
• Reinstatement. A financing statement reinstated by court order is effective from its original filing date and is treated as never having been ineffective, except against a purchaser who gave value in reliance on the termination statement (Sec. 9513.1(f)-(g)). The secured party gets 30 days after reinstatement to file a continuation statement if the filing would otherwise have lapsed (Sec. 9513.1(h)).
• Exclusions. An affidavit and any resulting termination are not effective as to a financing statement filed by or on behalf of a financial institution, as defined in Penal Code Section 14161(a) or Code of Civil Procedure Section 481.113, or a public entity, as defined in Code of Civil Procedure Section 481.200 (Sec. 9513.1(i)).

Because the affidavit is signed under penalty of perjury, and a debtor who guesses wrong can be ordered to pay the secured party's costs and attorney's fees (and, if the affidavit was made in bad faith, actual damages and a civil penalty), it is not a tool for a filing you simply dispute on the merits.

Treble court fees under Commercial Code Section 9625

AB 501 adds Commercial Code Section 9625(a)(2): court fees incurred by a debtor "shall be paid at the end of the judicial proceeding brought pursuant to this section," and "Any party deemed to have violated Section 765.010 of the Code of Civil Procedure shall be liable to the debtor for three times all of the court fees paid."

This sits in Section 9625, which governs court remedies where a secured party is not proceeding in accordance with Division 9 of the Commercial Code, and the deferral sentence refers to proceedings brought under "this section." Whether courts will apply the treble court fee provision in an ordinary Section 765.010 petition, as opposed to a Section 9625 proceeding, is an open question. Note also that "court fees" is not the same as attorney's fees.

What should I do about a false lien or UCC filing against me or my property?

Apart from UCC fixture filings, which are financing statements filed in the county real property records and appear to be reachable by the new Commercial Code affidavit, AB 501 does not create a new procedure for recorded real property instruments. Its main effects there are the higher maximum penalty under Section 765.040 and the broader petition language in Section 765.010(c)(1), which now also covers a person or entity "named in a lawsuit, financing statement, or notice of lis pendens in violation of this section," in addition to one whose property is subject to the lien or encumbrance. Which tool fits depends on what was recorded.

A notice of pending action (lis pendens)

If someone has sued and recorded a lis pendens, the expungement statutes in Code of Civil Procedure Section 405.30 and following are usually the most direct route. A party, or a nonparty with an interest in the property who obtains leave to intervene, may move to expunge in the court where the action is pending (Sec. 405.30), and "The claimant shall have the burden of proof under Section 405.31 and 405.32." The court must order expungement if the pleading does not contain a real property claim (Sec. 405.31) or if the claimant has not established by a preponderance of the evidence the probable validity of the real property claim (Sec. 405.32). Section 405.38 provides that the court "shall direct that the party prevailing on any motion under this chapter be awarded the reasonable attorney's fees and costs of making or opposing the motion unless the court finds that the other party acted with substantial justification or that other circumstances make the imposition of attorney's fees and costs unjust." A lis pendens recorded knowingly falsely to harass can also fall within Section 765.010(b)(1), which expressly lists notices of lis pendens.

A mechanics lien

For a recorded construction lien, the Civil Code has its own release procedure. A claimant must commence an action to enforce the lien within 90 days after recordation of the claim of lien, or the claim "expires and is unenforceable," unless a recorded extension of credit applies (Civ. Code Sec. 8460). If the claimant has not sued within that time, the owner may petition for a release order (Sec. 8480(a)), but only after giving the claimant notice, at least 10 days before filing the petition, demanding that the claimant execute and record a release (Sec. 8482). The claimant bears the burden of proving the validity of the lien at the hearing, and the prevailing party is entitled to reasonable attorney's fees (Sec. 8488). Count each deadline from the recording date shown on the lien itself. We cover the lien deadlines in more detail in California mechanics lien deadlines on a stalled project.

A "lien" with no statutory basis at all

Some filings, such as a "common law lien" or a self-styled claim against a property owner or official, do not fit any lien statute. For those, the Section 765.010 petition is designed for the job if you can show the filer knew it was false and acted to harass. Where intent is hard to prove, or where the instrument clouds title in a way that needs a judgment binding on everyone, a quiet title action under Code of Civil Procedure Section 760.010 and following may be the better vehicle. See our quiet title practice page for how those cases proceed, and our overview of California real estate litigation statutes of limitations for general timing rules in real estate litigation. Depending on the facts, a separate damages claim for slander of title may also be available, with its own elements.

Practical steps if a false filing appears

1. Get the filing itself and note its filing or recording date. Count every deadline from the document, not from when you learned of it. None of the statutes discussed here specifies business days for its time periods; confirm the computation with counsel.
2. Identify the instrument type. A lis pendens, mechanics lien, UCC financing statement, and "common law lien" each have different remedies.
3. Check the exclusions for financial institutions and public entities (Code Civ. Proc. Sec. 765.050; Com. Code Sec. 9513.1(i)).
4. Weigh the fee risk. Sections 765.030 and 9513.1(e) both allow fee awards against a challenger if the filing turns out to be valid.
5. Preserve evidence of intent. The $15,000 maximum penalty turns on knowledge and intent to harass (or, for a public officer or employee, intent to influence or hinder official duties).

If a bogus filing is holding up a sale or financing, you can contact our office to discuss which remedy fits the instrument in your chain of title.

Common questions

This article is general information about California law as of October 3, 2026 and is not legal advice. It does not create an attorney-client relationship. Anyone facing a specific dispute should consult a lawyer about their own circumstances.

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