CSLB Contract and Lien Laws 1 — Questions and Answers
Question 1: Under California's Mechanics' Lien Law, what is the deadline for a direct contractor to record a mechanics' lien after a Notice of Completion is filed?
- 30 days
- 60 days (Correct answer)
- 90 days
- 180 days
Correct answer: 60 days
A direct (prime) contractor must record a mechanics' lien within 60 days after a Notice of Completion is recorded by the owner.
Question 2: What is the purpose of a 'Preliminary Notice' (20-day preliminary notice) in California construction?
- To notify the owner that work will begin in 20 days
- To preserve a subcontractor's or material supplier's right to later file a mechanics' lien (Correct answer)
- To satisfy the building permit requirement
- To waive lien rights in exchange for payment
Correct answer: To preserve a subcontractor's or material supplier's right to later file a mechanics' lien
Serving a Preliminary Notice within 20 days of first providing work or materials is required for subcontractors and suppliers to preserve their mechanics' lien rights.
Question 3: In California, which party is responsible for recording a Notice of Completion after a construction project is finished?
- The general contractor
- The project architect
- The property owner (Correct answer)
- The CSLB
Correct answer: The property owner
The property owner records the Notice of Completion with the county recorder, which starts the shortened lien deadline period for contractors and suppliers.
Question 4: What is the maximum retention percentage that an owner may withhold from a contractor on a private California construction project?
- 5%
- 10% (Correct answer)
- 15%
- 20%
Correct answer: 10%
California Civil Code limits retention on private construction contracts to no more than 10% of each progress payment.
Question 5: Under California law, a mechanics' lien must be enforced by filing a lawsuit within how many days of recording the lien?
- 60 days
- 90 days (Correct answer)
- 180 days
- 365 days
Correct answer: 90 days
A mechanics' lien becomes unenforceable unless a lawsuit to foreclose the lien is filed in court within 90 days of recording.
Question 6: What is a 'Conditional Waiver and Release on Final Payment' used for in California construction?
- To certify that all subcontractors are licensed
- To release lien rights upon receiving final payment, contingent on the check clearing (Correct answer)
- To transfer project ownership to the general contractor
- To extend the warranty period on completed work
Correct answer: To release lien rights upon receiving final payment, contingent on the check clearing
A Conditional Waiver and Release on Final Payment releases lien rights only upon the actual receipt and clearance of the final payment check.
CSLB Contract and Lien Laws 1
Under California's Mechanics' Lien Law, what is the deadline for a direct contractor to record a mechanics' lien after a Notice of Completion is filed?