Contract and Lien Laws Flashcards

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?

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.

What is the purpose of a 'Preliminary Notice' (20-day preliminary notice) in California construction?

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.

In California, which party is responsible for recording a Notice of Completion after a construction project is finished?

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.

What is the maximum retention percentage that an owner may withhold from a contractor on a private California construction project?

Answer: 10%

California Civil Code limits retention on private construction contracts to no more than 10% of each progress payment.

Under California law, a mechanics' lien must be enforced by filing a lawsuit within how many days of recording the lien?

Answer: 90 days

A mechanics' lien becomes unenforceable unless a lawsuit to foreclose the lien is filed in court within 90 days of recording.

What is a 'Conditional Waiver and Release on Final Payment' used for in California construction?

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.