Running the Business · Part 3
Mechanics liens II: recording deadlines, the 90-day foreclosure clock, the four statutory release forms, stop payment notices, and payment bonds on public work
The preliminary notice keeps the lien right alive. This lesson is the right itself: the window in which a lien must be recorded after the job ends, which is shorter than most contractors think and shorter still if the owner records a notice of completion; the claim of lien's required contents and the Notice of Mechanics Lien that must be served on the owner or the lien is void; the 90-day deadline to file the foreclosure suit; and the four statutory waiver and release forms that are the only lawful way to give up lien rights, with the difference between conditional and unconditional that has cost contractors whole invoices. It closes with the two tools that replace the lien where the lien cannot reach: the stop payment notice on private jobs with a lender, and the payment bond on public work.
What the full lesson covers
- Direct contractor: record the lien after completing your contract and before the earlier of 90 days after completion of the whole work of improvement or 60 days after the owner records a notice of completion or cessation. Subcontractor: 90 days, or 30 days after a recorded notice of completion (Civil Code 8412, 8414). Calendar both from the day you finish.
- The claim of lien must contain the statutory items, be verified, and include the "NOTICE OF MECHANICS LIEN" text; a copy must be served on the owner by registered, certified, or first-class mail with a certificate of mailing, or the lien is unenforceable as a matter of law (8416).
- File the foreclosure action within 90 days after recording, or the lien expires (8460). A recorded lien with no suit is a cloud the owner can petition to remove.
- Use only the four Civil Code forms for waivers and releases: conditional and unconditional, progress and final (8132 to 8138). Any other form is void. Never sign an unconditional release before the money is in the bank.
- Where there is a construction lender, add a stop payment notice (8502 to 8506); on public works there is no lien, and the claim is on the payment bond and a stop notice to the agency.
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More lessons in Contracts and Getting Paid
- 1The home improvement contract (B&P 7159): every required element, the exact notices, and the three-day right to cancel
- 2The deposit cap: $1,000 or 10 percent, whichever is less, and progress payments that cannot exceed the work. CSLB's most common citation
- 3Service and repair contracts (B&P 7159.10): when the short form applies, what it must say, and how a service call falls out of it
- 4Subcontracts with GCs: the twelve clauses to read, what to strike, and what to negotiate
- 5Change orders: written, signed, before the work. Every time. Why verbal ones end in CSLB complaints
- 6Mechanics liens I: the 20-day preliminary notice. Miss it, lose your rights
- 7Mechanics liens II: recording deadlines, the 90-day foreclosure clock, the four statutory release forms, stop payment notices, and payment bonds on public workYou are here
- 8Collections: demand letter, lien, small claims, attorney. When each is worth it, and the one thing that makes all of them impossible
- 9Taking payment: cards, ACH, checks, cash, financing partners, and getting every dollar into the right account
- 10Case: the job that went unpaid. Where the contractor lost lien rights and how to have kept them
- 11Case: the deposit that became a citation
- 12Case: the change order that was never written
- 13Template: the home improvement contract, with every B&P 7159 notice verbatim
- 14Template: the service and repair contract (B&P 7159.10), one page, with the notices verbatim
- 15Template: the change order, one page, signed before the work
- 16Template: the 20-day preliminary notice, with the proof-of-notice declaration
- 17Template: the four statutory lien waiver and release forms (Civil Code 8132 to 8138), verbatim
- 18Template: the demand letter, homeowner version and general contractor version
- 19Template: the subcontract review checklist. Twelve clauses, three boxes each