California Lien Law Summary

NOTICE REQUIREMENTS

California requires that all parties (except laborers) who did not contract with the property owner to
send a 20-Day Preliminary Notice to preserve lien rights.

- Must be sent to Property Owner, Prime Contractor and the Construction Lender (if any);
- Must send, and keep an affidavit of delivery.
- Must be sent within 20 days from when Labor or Materials first delivered to the project.
- If sent after this 20-day period, notice only preserves party’s right to lien for labor or materials furnished within 20 days of the notice’s delivery.
- Must be sent by anyone working on a construction project who did not contract with the property owner.

THE MECHANIC’S LIEN

Referred to as “Claim of Lien”
- When Notice of Cessation or Notice of Completion is filed, Prime Contractors must file a Mechanic’s Lien within 60 days from the filing, and all others must filed within 30 days from the filing.
- If Notice of Cessation or Notice of Completion is not filed, all parties shave 90 days after completion of the work of the improvement to file the Mechanic’s Lien.
- Action to enforce the mechanic’s lien must be instituted within 90 days from the filing of the mechanic’s lien.
- Filed with County Recording Office
- If you don’t foreclose on your mechanic’s lien, you are required to release it. Failing to do so can subject you to statutory penalties of up to $2000.00 for the property owner’s legal costs in getting the mechanic’s lien removed.

TERMINOLOGY

Notice of Cessation is an instrument filed & signed by an owner that stipulates when work was discontinued on a project.

Notice of Completion is an instrument filed & signed by an owner that stipulates when work was completed on a project.

Completion of the Work is defined by §3086 as the actual completion of work signified by (1) occupation or use of work and a cessation of labor; (2) acceptance by owner of work; (3) stop of labor for 60 continuous days.

Prime Contractor is the party who contracts directly with the property owner.