California Contractor Lien Demand Letter Guide

📋 What is a Mechanics Lien in California?

A mechanics lien (also called a construction lien) is a legal claim against real property that secures payment for labor, materials, or services provided in construction or improvement of the property. California's mechanics lien law, codified in Civil Code Sections 8000-8848, gives contractors, subcontractors, material suppliers, and laborers powerful rights to ensure payment.

When to Use This Guide

Use this guide if you are seeking payment for construction work:

🚧 Unpaid Contractor

You completed construction work and the property owner refuses to pay or pay in full

🔨 Unpaid Subcontractor

You performed work for a general contractor who has not paid you

📦 Material Supplier

You supplied materials for a construction project and have not been paid

🛠 Equipment Rental

You rented equipment used in construction and payment is overdue

👍 What You Can Recover Through a Mechanics Lien

Principal amount - Full value of labor, materials, and services provided
Interest - Prejudgment interest from date payment was due
Attorney fees - Recoverable by prevailing party in lien foreclosure
Costs of suit - Filing fees, service costs, recording fees
Foreclosure - Forced sale of property to satisfy lien if not paid

Key Mechanics Lien Deadlines

📚 Preliminary Notice (20 Days)

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Under Civil Code Section 8200, subcontractors, material suppliers, and equipment rental companies must serve a preliminary 20-day notice to preserve lien rights. The notice must be served within 20 days of first furnishing labor or materials. Direct contractors (general contractors) are exempt from this requirement. Failure to serve timely limits your lien to work performed within 20 days before service.

⚖ Recording Deadline (90 Days)

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Under Civil Code Section 8412, a mechanics lien must be recorded within 90 days after completion of the work of improvement. If a Notice of Completion is recorded, direct contractors have 60 days and all others have 30 days from recording to record their lien. Missing these deadlines forfeits your lien rights entirely.

👥 Enforcement Deadline (90 Days)

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Under Civil Code Section 8460, you must file a lawsuit to foreclose on the mechanics lien within 90 days after recording the lien. If you fail to file suit or record a credit (extension agreement), the lien expires and becomes unenforceable. The property owner can also demand suit be filed, which shortens the deadline.

🛡 Stop Payment Notice

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A stop payment notice (CC 8500-8560) requires the owner to withhold funds from the direct contractor to pay your claim. This is especially valuable when the property has insufficient equity for a lien. Must be served before final payment. Bonded stop notices require a bond but are more powerful, requiring a formal response.

⚠ Deadlines are Strictly Enforced

California courts strictly enforce mechanics lien deadlines. Missing the 90-day recording deadline or 90-day enforcement deadline by even one day will result in complete loss of lien rights. Calculate your deadlines carefully and act promptly.

⚖ Legal Basis

California's mechanics lien law provides strong protections for those who contribute labor and materials to construction projects. These statutes form the basis of your claim.

Key California Statutes

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Civil Code Sections 8000-8848 (Mechanics Lien Law)

California's comprehensive mechanics lien statute, establishing who can claim liens, notice requirements, recording procedures, and enforcement mechanisms. Provides priority over most subsequent encumbrances and relates back to the commencement of construction.

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Civil Code Section 8200 (Preliminary Notice)

Requires subcontractors, material suppliers, and equipment lessors to serve a preliminary 20-day notice to preserve full lien rights. Notice must include specified information and be served on the owner, direct contractor, and construction lender if any.

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Civil Code Section 8412 (Recording Deadline)

Establishes the 90-day deadline for recording mechanics liens after completion of work. If a Notice of Completion is recorded, deadlines shorten to 60 days for direct contractors and 30 days for all others.

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Civil Code Section 8460 (Enforcement)

Requires foreclosure action to be filed within 90 days of lien recording. A properly recorded and timely enforced mechanics lien can result in forced sale of the property to satisfy the claim, similar to mortgage foreclosure.

Who Can Claim a Mechanics Lien

👷 Direct Contractors

General contractors with a direct contract with the property owner (no preliminary notice required)

🔨 Subcontractors

Contractors hired by the general contractor or another subcontractor (preliminary notice required)

📦 Material Suppliers

Suppliers of materials, fixtures, or equipment incorporated into the work (preliminary notice required)

🛠 Equipment Lessors

Companies renting equipment used at the construction site (preliminary notice required)

💼 Laborers

Workers who perform labor on the work of improvement (preliminary notice required)

📑 Design Professionals

Architects and engineers whose work is incorporated into the improvement (preliminary notice required)

Lien Priority and Amount

Relation back - Mechanics liens relate back to the date of commencement of work on the improvement
Priority over mortgages - A mechanics lien has priority over mortgages recorded after commencement of work
Lienable amount - The lien is limited to the reasonable value of labor/materials, not exceeding contract price
Owner's liability - Owner is not liable beyond the amount owed to the direct contractor at time of stop notice
Pro rata distribution - If multiple liens and insufficient funds, claimants share pro rata

💡 Preliminary Notice Protects Your Rights

Even if you miss the 20-day preliminary notice deadline, you can still serve a late notice. You will have lien rights for work performed within 20 days before the notice was served and all work after. Always serve preliminary notice as soon as you start work on any project.

✅ Evidence Checklist

Gather these documents before sending your demand letter or recording a lien. Click to check off items as you collect them.

📄 Contract Documents

✓ Written contract or work order
✓ Change orders and amendments
✓ Scope of work documentation
✓ Payment schedule from contract

📝 Notice Documentation

✓ Preliminary 20-day notice (proof of service)
✓ Date work commenced on project
✓ Date work completed
✓ Notice of Completion (if recorded by owner)

💰 Payment Records

✓ All invoices submitted
✓ Payments received (check copies, receipts)
✓ Outstanding balance calculation
✓ Retention amounts held

🏗 Work Documentation

✓ Daily logs and time records
✓ Material receipts and delivery tickets
✓ Photos of completed work
✓ Inspection reports and approvals

🔒 Verify Property Information

Before recording a lien, verify the property's legal description and owner's name by searching county recorder records. An incorrectly recorded lien may be invalid. Also confirm whether a Notice of Completion has been recorded, as this affects your deadlines.

💰 Calculate Your Damages

Your mechanics lien claim can include the following amounts. Here's what you may be entitled to recover.

Category	Description
Contract Balance	Unpaid balance due under the contract for completed work
Retention	Retention amounts that are now due (typically 10% held back)
Change Order Work	Approved change orders and extra work performed
Interest	Prejudgment interest from date payment was due (10% per year in CA)
Attorney Fees	Reasonable attorney fees if you prevail in lien foreclosure action
Costs	Recording fees, service costs, filing fees, and other litigation costs

💰 Mechanics Lien vs. Breach of Contract

A mechanics lien provides secured recovery - your claim is secured by the real property itself. If the owner doesn't pay, you can foreclose and force sale of the property. A simple breach of contract claim is unsecured, meaning you may win a judgment but struggle to collect.

📊 Sample Lien Amount Calculation

Example: Subcontractor Kitchen Remodel Project

Original contract amount $85,000

Approved change orders $12,500

Total contract value $97,500

Payments received ($45,000)

Balance due (including retention) $52,500

Interest (6 months at 10%) $2,625

Lien recording and service costs $350

TOTAL LIEN CLAIM $55,475

💡 Don't Overstate Your Lien

California law prohibits recording a lien for more than you are rightfully owed. Recording an excessive lien can result in liability for slander of title, including damages and attorney fees. Be accurate and conservative in calculating your lien amount.

📝 Sample Language

Copy and customize these paragraphs for your demand letter.

Opening Paragraph

I am writing on behalf of [YOUR COMPANY NAME] to demand immediate payment of $[AMOUNT] for labor and materials furnished on the construction project located at [PROPERTY ADDRESS]. Despite multiple requests, this amount remains unpaid and overdue. Please be advised that we have preserved our mechanics lien rights under California Civil Code Sections 8000-8848 and will record a lien if payment is not received within [10 DAYS].

Preliminary Notice Reference

As required by California Civil Code Section 8200, we served a Preliminary 20-Day Notice on [DATE OF PRELIMINARY NOTICE], which was received by the property owner, direct contractor, and construction lender. This notice preserved our full lien rights for all labor and materials furnished from [START DATE] through [END DATE]. We are fully entitled to record and enforce a mechanics lien against the property.

Lien Recording Warning

If we do not receive payment of $[AMOUNT] within [10 DAYS], we will immediately record a mechanics lien against the property at [PROPERTY ADDRESS]. Under California law, a mechanics lien encumbers the property and can result in foreclosure and forced sale. The lien will also appear in title searches, potentially affecting the owner's ability to sell or refinance the property until the lien is satisfied or released.

Stop Payment Notice Warning

In addition to our mechanics lien rights, we are prepared to serve a Stop Payment Notice pursuant to California Civil Code Section 8500, requiring the property owner to withhold funds otherwise payable to the general contractor. We are also prepared to make a claim against the contractor's license bond with the Contractors State License Board. We prefer to resolve this matter without these additional measures, but will pursue all available remedies if payment is not received promptly.

Payment Demand with Itemization

We hereby demand payment of the following amounts:

Contract balance: $[AMOUNT]
Approved change orders: $[AMOUNT]
Retention due: $[AMOUNT]
Interest to date: $[AMOUNT]
TOTAL DUE: $[TOTAL]

Payment should be made payable to [YOUR COMPANY NAME] and delivered to [YOUR ADDRESS] no later than [DATE].

🚀 Next Steps

What to do after sending your demand letter and how to pursue payment through the lien process.

Mechanics Lien Process Timeline

📌 Critical Deadlines

Calculate your deadlines carefully from the date work was completed. If a Notice of Completion was recorded, your deadline is shortened. Use the County Recorder's online records to check for a Notice of Completion. Missing any deadline by even one day will forfeit your lien rights.

Step-by-Step Process

Step 1: Demand Letter

Send formal demand for payment with lien recording warning (allow 10 days for response)

Step 2: Record Lien

Prepare and record mechanics lien with County Recorder (within 90 days of completion)

Step 3: Serve Lien Copy

Serve copy of recorded lien on property owner within 10 days of recording

Step 4: File Foreclosure

File lawsuit to foreclose lien within 90 days of recording (or face expiration)

If They Don't Pay After Lien Recording

File Foreclosure Action
Within 90 days of recording the lien, file a complaint to foreclose the mechanics lien in Superior Court. The complaint seeks a court order to sell the property to satisfy your claim. Record a lis pendens to provide notice of the pending action.
Consider Settlement
Most mechanics lien cases settle before trial. Once you've recorded a lien and filed suit, property owners often become motivated to negotiate. Mediation may be required by the court and often leads to resolution.
Pursue Alternative Remedies
In addition to the lien, consider filing a claim with the Contractors State License Board against a licensed contractor's bond, or pursuing a breach of contract claim. These can provide additional leverage.

Need Legal Help?

Mechanics lien deadlines are strict and unforgiving. Get a 30-minute strategy call with a construction attorney to protect your payment rights.

Book Consultation - $125

California Resources

Contractors State License Board: cslb.ca.gov - License verification and bond claims
County Recorder: Record liens and search for Notice of Completion
CA Mechanics Lien Law: Civil Code 8000-8848
State Bar Lawyer Referral: calbar.ca.gov - Find a construction attorney
California Courts: courts.ca.gov - Forms and procedures for foreclosure actions