Mechanics' Liens - timing of events

The California 20-Day Preliminary Notice preserves a lien claimant’s rights on a construction project when the notice is served by the claimant on the property owner, the lender and the general contractor (if a subcontractor or supplier). As the name implies, the 20 days means the claim can only extend for work performed up to 20 days before the notice was served. If you have worked on a project (not as an employee, but as a contractor) for 60 days before serving the 20-day preliminary notice, your lien rights only extend to the most recent 20 days. You have no right to lien the value of the work performed during the first 40 days.

However, if you do not serve the 20-day notice at all, you will have lost all lien rights. The exception is if you have a contract directly with the owner, or are a laborer for wages, then you do do not need to serve a 20 day preliminary notice.

Common sense dictates that It is always a good idea to serve the notice no later than 20 days after you start work on a project.

You can only record a mechanic’s lien after all work contracted for is completed, or you no longer have the ability to complete the work (project has shut down, you have been terminated, etc.). If you record a lien before the work is completed, you have created a premature lien, which is not valid and you must remove it.

Without a notice of completion

The mechanic’s lien against any individual property must be recorded within 90 days of the completion of the work of improvement unless there is a recorded notice of completion.

With a notice of completion

With a recorded notice of completion, the deadlines are as follows: A prime (general) contractor must record a lien within 60 days, a subcontractor or supplier must record a lien within 30 days. This assumes that the owner recorded the notice of completion within 10 days of actual completion for these deadlines to apply. And, the owner must serve all those that provided a 20-preliminary notice, with a notice that a notice of completion has been recorded, within 10 days of the notice of completion recordation. Yes, it seems convoluted, and yes, it is important that all the deadlines are followed, otherwise you may lose your mechanic's lien rights.

If for some reason, the notice of completion is not done according to the above timetable, the process may revert to the 90 day limit.

If your work spans multiple properties as would be common with a housing subdivision, your deadline is determined by the completion of each individual property, not the completion of the entire project.

File a lawsuit within 90 days of recording the lien. This is the only way to enforce your lien rights. If you go past the 90 day deadline (there are some limited exceptions), the lien becomes unenforceable and you are obligated to go through the steps to remove the now "stale" lien. If you refuse to do this, you may be liable for up to $2000 in attorney fees for the owner to petition the Court to have the lien removed.

A lien foreclosure lawsuit cannot be filed in small claims court.

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