California Mechanics Lien Demand Letters

Civil Code 8000-9566 | Preliminary Notices | Stop Payment | Payment Bonds | Lien Foreclosure

California Mechanics Lien Law Overview
Core Legal Framework: California Civil Code Sections 8000-9566 govern mechanics liens, stop payment notices, and payment bond claims. These laws provide contractors, subcontractors, material suppliers, and laborers with powerful remedies to secure payment for work performed on real property. Understanding these protections is essential for anyone in the construction industry.
California Civil Code 8000-9566 - Mechanics Lien Law

The California mechanics lien statute provides comprehensive remedies for construction professionals:

Code Section What It Covers
Civil Code 8000-8118 General provisions, definitions, and notice requirements
Civil Code 8200-8216 Preliminary 20-day notice requirements
Civil Code 8400-8494 Mechanics lien recording, enforcement, and release
Civil Code 8500-8538 Stop payment notices for private works
Civil Code 8600-8614 Payment bond claims for private works
Civil Code 9000-9566 Public works - stop payment notices and payment bonds
Who Has Mechanics Lien Rights?

California law grants lien rights to anyone who contributes to the improvement of real property:

  • Direct Contractors (General Contractors): Those who contract directly with the property owner
  • Subcontractors: Those who contract with the direct contractor or other subcontractors
  • Material Suppliers: Those who furnish materials incorporated into the work
  • Equipment Lessors: Those who rent equipment used in the improvement
  • Laborers: Workers who provide labor on the construction project
  • Design Professionals: Architects, engineers, and surveyors who provide design services
Direct Contractor vs. Subcontractor Rights: Direct contractors (those who contract directly with the owner) have the strongest lien rights. They do not need to serve a preliminary 20-day notice. Subcontractors, material suppliers, and laborers must serve the preliminary notice to preserve their lien rights.
Preliminary 20-Day Notice (Civil Code 8200-8216)

Most claimants must serve a preliminary 20-day notice to preserve lien rights:

Who Must Serve When to Serve To Whom
Subcontractors Within 20 days of first furnishing labor/materials Owner, direct contractor, construction lender
Material Suppliers Within 20 days of first furnishing materials Owner, direct contractor, construction lender
Laborers (not employed by direct contractor) Within 20 days of first providing labor Owner, direct contractor, construction lender
Equipment Lessors Within 20 days of first providing equipment Owner, direct contractor, construction lender
Direct Contractors NOT REQUIRED N/A
Late Preliminary Notice: If you serve a preliminary notice more than 20 days after first furnishing labor or materials, you can only claim a lien for work performed within 20 days before serving the notice and thereafter. Early work is lost. Always serve preliminary notices immediately upon starting work.
Mechanics Lien Recording Deadlines (Civil Code 8412-8414)

Strict deadlines apply to recording mechanics liens:

Scenario Recording Deadline Legal Authority
No Notice of Completion or Cessation recorded 90 days after completion of the work of improvement Civil Code 8412(a)
Notice of Completion recorded (Direct Contractor) 60 days after Notice of Completion is recorded Civil Code 8412(b)
Notice of Completion recorded (Subcontractor/Supplier) 30 days after Notice of Completion is recorded Civil Code 8412(b)
Notice of Cessation recorded 30 days after Notice of Cessation is recorded Civil Code 8412(c)
Critical Deadline: These deadlines are absolute. If you fail to record your mechanics lien within the applicable time period, you permanently lose your lien rights. There are no extensions or exceptions. Calculate your deadline carefully and record early to avoid any risk.
Stop Payment Notice (Civil Code 8500-8538)

A stop payment notice is a powerful remedy for claimants when a construction lender is involved:

  • What It Does: Requires the construction lender to withhold funds from remaining loan proceeds
  • Who Can Serve: Anyone entitled to record a mechanics lien (after serving preliminary notice if required)
  • Bonded Stop Notice: Adding a bond (125% of claim amount) makes the stop notice "bonded" and requires the lender to withhold funds
  • Deadline: Must be served before the expiration of time to record a mechanics lien
  • Effect: Lender must withhold sufficient funds to pay the claim
Payment Bond Claims (Civil Code 8600-8614)

When the direct contractor has a payment bond, claimants can pursue the surety:

  • Payment Bond: A surety bond that guarantees payment to subcontractors and suppliers
  • Preliminary Notice: Must have served preliminary 20-day notice to preserve bond claim rights
  • Deadline: Claim must be made within 6 months of completion of work or recordation of notice of completion
  • Enforcement: If surety does not pay within 30 days of claim, may sue on the bond
  • Attorney Fees: Prevailing claimant may recover attorney fees from surety
Lien Release Requirements (Civil Code 8132-8138)

California law requires execution of lien releases in exchange for payment:

Type of Release When Used Effect
Conditional Waiver - Progress Payment When receiving progress payment, before check clears Release is effective only when payment is actually received
Unconditional Waiver - Progress Payment After progress payment check has cleared Immediately releases lien rights for amount stated
Conditional Waiver - Final Payment When receiving final payment, before check clears Conditional release of all lien rights upon payment
Unconditional Waiver - Final Payment After final payment check has cleared Complete release of all lien rights
Statutory Forms Required: California law prescribes specific forms for lien releases (Civil Code 8132-8138). Using non-statutory forms may result in the release being unenforceable. Always use the exact statutory language when executing or requesting lien releases.
Construction Defect Counterclaims

Property owners often respond to lien claims with counterclaims for defective work:

  • Right to Cure (Civil Code 895-945.5): For residential construction, owners must provide notice and opportunity to repair before filing suit
  • Standards (Civil Code 896): Specific functionality standards for residential construction components
  • Statute of Limitations: Generally 4 years for patent defects, 10 years for latent defects (Code of Civil Procedure 337.1, 337.15)
  • Offset: Owner may offset defect repair costs against lien claim
  • Cross-Complaint: Owner may file cross-complaint for damages exceeding lien amount
Document Everything: If an owner raises defect claims, demand specific written descriptions and access to inspect. Many defect claims are pretextual attempts to avoid payment. Maintain detailed documentation of your work, including photos, daily logs, and any change orders signed by the owner.
Common Mechanics Lien Issues
1. Non-Payment by General Contractor
Most Common Issue: The general contractor has been paid by the owner but refuses to pay subcontractors and suppliers. This is the classic scenario where mechanics lien rights become essential. Your lien is against the property, not the general contractor personally.
  • General contractor received payment but claims cash flow problems
  • General contractor disputes quality of work to avoid paying
  • General contractor has gone out of business or filed bankruptcy
  • General contractor offset payments for alleged backcharges
  • General contractor demands additional work before releasing payment
Subcontractor Protection: This is exactly why mechanics lien rights exist. Even if the general contractor does not pay you, you can lien the owner's property. The owner may be forced to pay you directly and then seek reimbursement from the general contractor.
2. Owner Payment Defense
  • Owner claims full payment to GC: Owner says they paid the general contractor in full
  • Double payment fear: Owner refuses to pay subcontractor because they already paid GC
  • No conditional releases: Owner paid without obtaining lien releases
  • Improper releases: GC provided releases but they were forged or unauthorized
Owner's Risk: Under California law, an owner who pays a general contractor without obtaining unconditional lien releases from subcontractors takes the risk that those subcontractors will file liens. The owner may have to pay twice - once to the GC and again to lien claimants. This is why owners should always require conditional or unconditional releases with each payment.
3. Disputed Work Quality or Scope
Type of Dispute How to Address
Alleged defective work Demand specific written description; offer opportunity to inspect and cure
Work not completed Document completion with photos, punch list sign-offs, certificates of occupancy
Unauthorized change orders Provide signed change orders, emails, or other written authorization
Scope disputes Reference original contract, specifications, and approved changes
Delay claims Document cause of delays, weather records, change order impacts
4. Missed Preliminary Notice Deadline
Critical Mistake: Failing to serve the preliminary 20-day notice within 20 days of first furnishing labor or materials limits your lien rights. You can only claim amounts for work done within 20 days before the notice was served and work done after.
  • Preliminary notice not served at all - limited or no lien rights
  • Preliminary notice served late - lien limited to recent work only
  • Preliminary notice sent to wrong parties - may be defective
  • No proof of service maintained - cannot prove compliance
Best Practice: Serve preliminary notices immediately upon starting any project. Many contractors serve the notice before even beginning work. This ensures you never miss the deadline and preserves your full lien rights from day one.
5. Missed Lien Recording Deadline
  • 90-day deadline missed: Failed to record within 90 days of completion
  • Notice of Completion trap: Owner recorded Notice of Completion, reducing deadline to 30/60 days
  • Completion date disputed: Disagreement about when work was actually completed
  • Recording errors: Lien recorded but with technical defects
Watch for Notice of Completion: Property owners often record a Notice of Completion specifically to shorten the lien deadline. Subcontractors have only 30 days from recording to file their lien. Monitor the county recorder's office for notices affecting your projects.
6. Lien Release Problems
  • Signed conditional release but payment check bounced
  • Signed unconditional release under duress or by mistake
  • Released more than amount actually received
  • Forged or unauthorized release submitted by general contractor
  • Wrong statutory form used - release may be unenforceable
Conditional vs. Unconditional: Always use conditional releases until the payment check has cleared your bank. A conditional release becomes effective only upon actual receipt of payment. If you sign an unconditional release before receiving payment and the check bounces, you may have waived your lien rights.
7. Residential Property Issues
  • Homestead exemption: Owner claims homestead protection (does not apply to mechanics liens for work on the property)
  • Consumer protection: Enhanced requirements for residential construction contracts
  • SB 800 (Civil Code 895-945.5): Right to repair requirements for residential construction defects
  • Contractor licensing: Unlicensed contractors cannot enforce liens (Business and Professions Code 7031)
Licensing Requirement: In California, an unlicensed contractor cannot file a mechanics lien, sue for payment, or enforce any construction contract. This includes contractors whose license lapsed during the project or who performed work outside their license classification. Verify your license is current and covers the work performed.
How to Write an Effective Mechanics Lien Demand Letter
Step 1: Verify Your Lien Rights

Before writing a demand letter, confirm you have preserved your mechanics lien rights:

  • Contractor License: Verify your license was active throughout the project and covers the work performed
  • Preliminary Notice: Confirm you served the 20-day notice properly (if required)
  • Lien Deadline: Calculate how much time remains to record your lien
  • Written Contract: Locate your contract, change orders, and payment terms
  • Payment History: Document all payments received and outstanding balance
  • Completion Status: Determine when work was completed or will be completed
Step 2: Gather Documentation
Document Type Purpose
Contract and Change Orders Establishes agreed price and scope of work
Preliminary 20-Day Notice Proves preservation of lien rights
Invoices and Pay Applications Shows amounts billed and due dates
Payment Records Proves amounts paid and outstanding balance
Daily Logs and Photos Documents work performed and completion
Correspondence Shows communication history and payment demands
Lien Releases Given Shows amounts already released from lien
Step 3: Calculate Total Amount Due
Mechanics Lien Amount: Your lien is for the reasonable value of labor, materials, and equipment furnished. This typically includes:
  • Original contract amount
  • Approved change orders
  • Interest (if contract provides)
  • Less payments already received
  • Less amounts covered by valid lien releases
Step 4: Choose Your Demand Strategy

Different situations call for different types of demand letters:

Situation Strategy
Payment overdue, lien deadline approaching Pre-lien demand with specific deadline before recording
Construction lender involved Stop payment notice demand to freeze loan proceeds
Lien already recorded Lien enforcement demand with foreclosure deadline
Payment bond available Payment bond claim demand to surety
Initial non-payment Standard demand letter referencing lien rights
Step 5: Essential Components of Your Letter
  • Clear Identification: Property address, owner name, project description
  • Legal Basis: Reference Civil Code 8000 et seq. and your lien rights
  • Amount Due: Specific dollar amount with itemization if complex
  • Work Performed: Description of labor, materials, or services furnished
  • Payment History: Amounts paid and remaining balance
  • Deadline: Specific date by which payment must be received
  • Consequences: Clearly state you will record a lien, serve stop notice, or foreclose
  • Contact Information: How to pay or discuss the matter
Tone and Language: Be professional but firm. State facts clearly and avoid emotional language. Reference specific California code sections to show you understand your legal rights. Clearly describe consequences of non-payment without making threats you cannot or will not follow through on.
Step 6: Sending to Multiple Parties

In construction disputes, you may need to send demands to multiple parties:

  • Property Owner: The person or entity that owns the property being improved
  • General Contractor: If you are a subcontractor, your direct contractual relationship
  • Construction Lender: If there is a construction loan, for stop payment notice purposes
  • Surety: If a payment bond exists, the surety company
  • Owner's Attorney: If represented, copy to their counsel
Step 7: Delivery Method
  • Certified Mail, Return Receipt: Standard for demand letters, provides proof
  • Personal Service: Consider for urgent matters or if certified mail ignored
  • Email plus Hard Copy: Send both for immediate and documented notice
  • Overnight Delivery: Use when deadline is imminent
Follow Through: A demand letter is only effective if you follow through. If your deadline passes without payment, take the next step immediately - record your lien, serve a stop payment notice, or file suit. Deadlines in mechanics lien law are strict and unforgiving.
Sample Mechanics Lien Demand Letters
Sample 1: Pre-Lien Demand Letter
[YOUR COMPANY NAME] [Contractor License No. XXXXXX] [Your Business Address] [City, State ZIP] [Phone Number] [Email Address] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [and via email to: recipient@email.com] [Property Owner Name] [Owner Address] [City, State ZIP] [General Contractor Name (if applicable)] [GC Address] [City, State ZIP] RE: DEMAND FOR PAYMENT - MECHANICS LIEN RIGHTS NOTICE Property: [Property Address] Project: [Project Name/Description] Amount Due: $[Amount] Dear [Owner Name / General Contractor Name]: This letter constitutes a formal demand for payment and notice of intent to record a mechanics lien against the above-referenced property pursuant to California Civil Code Sections 8400-8494. SUMMARY OF CLAIM: [Your Company Name] provided [labor/materials/equipment] for the improvement of the real property located at [Property Address]. We performed this work under contract with [General Contractor Name / Owner Name] dated [Contract Date]. WORK PERFORMED: [Description of labor, services, or materials furnished - be specific] AMOUNT DUE: Original Contract Amount: $[Amount] Approved Change Orders: $[Amount] Total Contract Value: $[Amount] Less: Payments Received: ($[Amount]) ---------------------------------------- BALANCE DUE: $[Amount] PRELIMINARY NOTICE: We served our Preliminary 20-Day Notice on [Date], copies of which were sent to the property owner, direct contractor, and construction lender as required by California Civil Code Section 8200. [Attach copy if helpful] DEMAND FOR PAYMENT: We demand payment of the full amount of $[Amount] within TEN (10) CALENDAR DAYS of your receipt of this letter. If we do not receive payment in full by [Specific Date], we will immediately record a Mechanics Lien against the property located at [Property Address] pursuant to California Civil Code Section 8412. CONSEQUENCES OF LIEN RECORDING: A recorded mechanics lien: 1. Creates a cloud on title to the property 2. May prevent refinancing or sale of the property 3. Will require payment of our claim plus costs to release 4. Can be foreclosed through judicial sale of the property 5. May result in additional liability for attorney fees and costs We would prefer to resolve this matter without recording a lien. However, we have strict deadlines to protect our rights and will not hesitate to record if payment is not received. PAYMENT INSTRUCTIONS: Please remit payment to: [Your Company Name] [Your Address] Or via wire transfer to: [Bank Name] [Account Number] [Routing Number] Contact me immediately at [Phone] or [Email] if you wish to discuss this matter or make payment arrangements. This letter is a demand for payment and notice of intent to lien. Nothing in this letter is intended as a waiver of any rights or remedies available under California law. Sincerely, [Your Signature] [Your Printed Name] [Your Title] [Your Company Name] Contractor License No. [XXXXXX] Enclosures: - Copy of Contract - Invoices - Copy of Preliminary 20-Day Notice - Proof of Service of Preliminary Notice
Sample 2: Stop Payment Notice Demand Letter
[YOUR COMPANY NAME] [Contractor License No. XXXXXX] [Your Business Address] [City, State ZIP] [Phone Number] [Email Address] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED [Construction Lender Name] [Lender Address] [City, State ZIP] [Property Owner Name] [Owner Address] [City, State ZIP] [General Contractor Name] [GC Address] [City, State ZIP] RE: STOP PAYMENT NOTICE - CALIFORNIA CIVIL CODE 8500 Property: [Property Address] Loan Number: [If Known] Amount of Claim: $[Amount] To [Construction Lender Name] and All Interested Parties: PLEASE TAKE NOTICE that [Your Company Name] hereby makes this Stop Payment Notice pursuant to California Civil Code Section 8500 et seq. CLAIMANT INFORMATION: Name: [Your Company Name] Address: [Your Address] Contractor License: [License Number] Telephone: [Phone] PROPERTY INFORMATION: Property Address: [Full Property Address] Owner of Record: [Property Owner Name] Direct Contractor: [General Contractor Name] Construction Lender: [Lender Name] NATURE OF CLAIM: [Your Company Name] has furnished [labor/materials/equipment] for the improvement of the above-described property. We are owed $[Amount] for this work, which remains unpaid despite demand. WORK FURNISHED: We provided the following work/materials: [Detailed description of work, materials, or equipment furnished] The work was furnished from [Start Date] to [End Date or "ongoing"]. PRELIMINARY NOTICE: We served our Preliminary 20-Day Notice on [Date], in compliance with California Civil Code Section 8200. [Copies attached] AMOUNT OF CLAIM: Total Value of Work/Materials: $[Amount] Less: Payments Received: ($[Amount]) ---------------------------------------- AMOUNT OF THIS CLAIM: $[Amount] DEMAND FOR WITHHOLDING: Pursuant to California Civil Code Section 8508, you are hereby notified to withhold from any amounts otherwise due to [General Contractor Name] sufficient funds to satisfy this claim of $[Amount]. TO THE CONSTRUCTION LENDER: This Stop Payment Notice is given pursuant to Civil Code Section 8500. You are required to withhold from future disbursements from the construction loan sufficient funds to satisfy this claim. CONSEQUENCES OF NON-COMPLIANCE: If the construction lender fails to withhold funds as required by this Stop Payment Notice, the lender may be personally liable for the amount of this claim pursuant to Civil Code Section 8538. DEMAND FOR PAYMENT: In addition to this Stop Payment Notice, we demand payment of $[Amount] from [General Contractor Name] and/or [Owner Name] within TEN (10) DAYS of receipt of this notice. If payment is not received, we will: 1. Record a Mechanics Lien against the property 2. Pursue all remedies under the construction loan documents 3. File suit to enforce our lien and stop payment notice rights 4. Seek recovery of attorney fees and costs PROOF OF SERVICE: This Stop Payment Notice is being served by certified mail, return receipt requested, on the construction lender, property owner, and direct contractor as required by Civil Code Section 8506. Sincerely, [Your Signature] [Your Printed Name] [Your Title] [Your Company Name] Contractor License No. [XXXXXX] Enclosures: - Copy of Preliminary 20-Day Notice and Proof of Service - Invoices and Payment Applications - Copy of Contract/Purchase Order [BONDED STOP PAYMENT NOTICE ADDENDUM - If Applicable] This Stop Payment Notice is accompanied by a surety bond in the amount of $[125% of claim amount] issued by [Surety Company Name], Bond Number [XXXXX]. Pursuant to Civil Code Section 8532, this constitutes a Bonded Stop Payment Notice requiring withholding of funds.
Sample 3: Lien Enforcement Demand Letter
[YOUR COMPANY NAME] [Contractor License No. XXXXXX] [Your Business Address] [City, State ZIP] [Phone Number] [Email Address] [Date] VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND VIA EMAIL: [owner@email.com] [Property Owner Name] [Owner Address] [City, State ZIP] RE: NOTICE OF INTENT TO FORECLOSE MECHANICS LIEN Property: [Property Address] Recorded Lien: Document No. [Recording Number] Recording Date: [Date] Amount Due: $[Amount Plus Interest and Costs] Dear [Owner Name]: This is a formal demand for payment and notice of our intent to foreclose the Mechanics Lien recorded against your property. RECORDED MECHANICS LIEN: On [Recording Date], [Your Company Name] recorded a Mechanics Lien against the real property located at [Property Address] in the Official Records of [County] County, California, as Document Number [Recording Number]. The lien was recorded for the principal amount of $[Amount] for [labor/materials/equipment] furnished for the improvement of your property. CURRENT AMOUNT DUE: Principal Amount of Lien: $[Amount] Interest (at legal rate): $[Amount] Recording Fees Paid: $[Amount] ---------------------------------------- TOTAL CURRENTLY DUE: $[Amount] If we are forced to file suit to foreclose this lien, we will also seek recovery of attorney fees, court costs, and additional interest through the date of judgment. FORECLOSURE DEADLINE: Under California Civil Code Section 8460, a mechanics lien must be enforced within 90 DAYS from the date of recording. Our lien was recorded on [Date]. The deadline to file a foreclosure action is [Date - 90 days from recording]. CONSEQUENCES OF FORECLOSURE: If we file a lien foreclosure action: 1. A Lis Pendens will be recorded against your property, creating an additional cloud on title 2. Your property may be sold at judicial foreclosure sale 3. You will be liable for our attorney fees and court costs 4. The lawsuit will become a matter of public record 5. Your ability to refinance or sell the property will be severely impacted FINAL OPPORTUNITY TO RESOLVE: We are providing you with this final opportunity to pay the amount due and obtain a release of the mechanics lien. DEADLINE: You must pay the full amount of $[Amount] within FOURTEEN (14) DAYS of your receipt of this letter, but in no event later than [Specific Date]. PAYMENT INSTRUCTIONS: Payment must be made by certified check, cashier's check, or wire transfer: [Your Company Name] [Your Address] Wire Transfer: [Bank Name] [Routing Number] [Account Number] LIEN RELEASE: Upon receipt and clearance of payment, we will immediately record a Release of Mechanics Lien in the Official Records of [County] County at our expense. NOTICE OF INTENT TO FORECLOSE: If payment is not received by [Deadline Date], we will file a lien foreclosure action in the Superior Court of California, County of [County], without further notice. We will seek judgment for the full amount of the lien, plus interest, attorney fees, and costs, and will pursue foreclosure sale of the property. This is your final notice before litigation. Contact me immediately at [Phone] or [Email] if you wish to discuss payment or payment arrangements. Sincerely, [Your Signature] [Your Printed Name] [Your Title] [Your Company Name] Contractor License No. [XXXXXX] cc: [Your Attorney, if represented] [General Contractor, if applicable] [Title Company, if known] Enclosures: - Certified copy of recorded Mechanics Lien - Supporting invoices and payment history - Copy of original contract
Enforcement Options and Remedies
1. Recording the Mechanics Lien
Creating a Lien Against Property: A recorded mechanics lien creates a security interest in the property itself. It clouds the title and must be resolved before the property can be sold or refinanced. This is one of the most powerful collection tools available to contractors.

Recording Requirements (Civil Code 8416):

  • Must be recorded in the county where the property is located
  • Must contain all required statutory information
  • Must be verified (signed under penalty of perjury)
  • Must be served on property owner within 10 days of recording
  • Recording fees vary by county (typically $20-50)

Contents of Mechanics Lien (Civil Code 8416):

  • Statement of claimant's demand after deducting credits and offsets
  • Name of owner or reputed owner
  • General statement of the kind of work furnished
  • Name of the person who contracted for the work
  • Legal description of the property
  • Claimant's signature and verification
2. Lien Foreclosure (Civil Code 8460-8470)

To enforce a mechanics lien, you must file a foreclosure lawsuit:

Requirement Details
Filing Deadline Must file within 90 days of recording the lien
Lis Pendens Must record Notice of Pending Action at time of filing
Court Superior Court of the county where property is located
What You Can Recover Principal, interest, attorney fees (if contract provides), court costs
Outcome Judgment and potential forced sale of property
90-Day Foreclosure Deadline: You MUST file a foreclosure lawsuit within 90 days of recording your mechanics lien. This deadline is absolute. If you miss it, your lien is unenforceable and must be released. Calendar this deadline immediately upon recording.
3. Stop Payment Notice Enforcement

If you served a stop payment notice on a construction lender:

  • Lender Must Withhold: For bonded stop notices, lender must withhold funds or face personal liability
  • Summary Proceeding: Can seek court order requiring lender to withhold (Civil Code 8520)
  • Release Bond: Lender or owner can obtain release by posting bond equal to 125% of claim
  • Enforcement Action: Must file lawsuit within 90 days of filing mechanics lien (same deadline)
4. Payment Bond Claims
Alternative to Property Lien: If the general contractor provided a payment bond, you can make a claim against the surety. This provides an alternative source of recovery without having to foreclose on the property.

Payment Bond Claim Process:

  • Verify a payment bond exists (check permit or request from owner/GC)
  • Confirm you served preliminary 20-day notice
  • Submit written claim to surety within 6 months of completion or notice of completion
  • Provide documentation: contract, invoices, proof of work, preliminary notice
  • If surety denies or does not respond within 30 days, file lawsuit
  • Prevailing claimant can recover attorney fees from surety
5. Breach of Contract Claims

In addition to lien remedies, you can sue for breach of contract:

  • Against General Contractor: If GC did not pay you per subcontract
  • Against Owner: If owner breached direct contract with you
  • Damages: Contract amount, interest, consequential damages
  • Attorney Fees: If contract contains attorney fee provision
  • No Property Required: Contract claim does not require foreclosure on property
6. Public Works Remedies (Civil Code 9000-9566)

For public construction projects (no lien rights against public property):

Remedy Description
Payment Bond Claim Public works require payment bonds; claim against surety
Stop Payment Notice Serve on public entity to withhold funds from contractor
Preliminary Notice Required within 20 days of first furnishing work
Claim Deadline Within 30 days of completion or notice of completion
Lawsuit Deadline Within 6 months of completion
7. Lien Priority and Competing Claims
Lien Priority: Mechanics liens generally relate back to the date work commenced on the project. This can give them priority over later-recorded mortgages. However, a construction lender's deed of trust that is recorded before work begins typically has priority over mechanics liens.

Priority Rules:

  • All mechanics liens have equal priority regardless of recording date
  • Mechanics liens prime mortgages recorded after work commenced
  • Construction loans recorded before commencement have priority
  • If property sale does not satisfy all liens, pro-rata distribution
8. Defending Against Owner Counterclaims

Owners commonly raise these defenses and counterclaims:

  • Defective Work: Demand specific written description; inspect and offer to cure
  • Incomplete Work: Document completion with photos, certificates, punch lists
  • Unlicensed Contractor: Verify license was active throughout project
  • No Preliminary Notice: Produce notice and proof of service
  • Lien Technical Defects: Ensure lien contains all required statutory elements
  • Excessive Amount: Document all work and reasonable value
Right to Repair (Residential): For residential construction, owners must follow the pre-litigation procedures in Civil Code 895-945.5 before suing for construction defects. This includes providing written notice of claimed defects and allowing the contractor an opportunity to inspect and repair. Failure to follow these procedures can result in dismissal of defect claims.
Attorney Services
Need Help With Your Mechanics Lien Claim?

I help contractors, subcontractors, and material suppliers protect their payment rights under California mechanics lien law. From preliminary notices to lien foreclosure, I provide experienced guidance to ensure you get paid for your work.

How I Can Help
  • Preliminary Notice Review: Verify proper service and timing of 20-day notices
  • Lien Rights Evaluation: Assess whether you have valid lien rights and calculate deadlines
  • Demand Letter Drafting: Prepare effective pre-lien and enforcement demand letters
  • Mechanics Lien Preparation: Draft and record liens that comply with all statutory requirements
  • Stop Payment Notices: Serve notices on construction lenders to freeze loan funds
  • Payment Bond Claims: Pursue claims against sureties for unpaid work
  • Lien Foreclosure: File and prosecute foreclosure actions in Superior Court
  • Defense of Counterclaims: Respond to owner defect claims and other defenses
  • Settlement Negotiations: Negotiate resolution to avoid costly litigation
Common Cases I Handle
  • Subcontractors not paid by general contractors
  • Material suppliers owed for delivered materials
  • General contractors not paid by property owners
  • Disputed change orders and extra work claims
  • Stop payment notice enforcement against lenders
  • Payment bond claims on bonded projects
  • Lien foreclosure actions
  • Defense against construction defect counterclaims
  • Lien release disputes and wrongful lien claims
When to Consult an Attorney
Consider consulting an attorney immediately if:
  • You are approaching a deadline (preliminary notice, lien recording, or foreclosure)
  • The amount at stake is substantial (over $10,000)
  • The owner or GC is disputing your work or raising defect claims
  • A Notice of Completion has been recorded (shortens your deadline)
  • You need to record a lien but are unsure of requirements
  • You have already recorded a lien and need to foreclose
  • You are dealing with a public works project
  • The property owner has filed bankruptcy
  • You are facing licensing issues that may affect your rights
Time-Sensitive: Mechanics lien law has strict, unforgiving deadlines. Missing a deadline by even one day can permanently destroy your lien rights. If you are uncertain about your deadlines or rights, consult an attorney immediately rather than risk losing your ability to collect.
Schedule a Consultation

Book a call to discuss your mechanics lien case. I will review your situation, calculate your deadlines, and recommend the best strategy to protect your payment rights.

Contact Information

Email: owner@terms.law

Frequently Asked Questions
The deadline depends on whether a Notice of Completion or Cessation has been recorded. If no notice is recorded, you have 90 days from completion of the work of improvement. If a Notice of Completion is recorded, direct contractors have 60 days and subcontractors/suppliers have 30 days from recording. If a Notice of Cessation is recorded, all claimants have 30 days. These deadlines are absolute - missing them by even one day destroys your lien rights.
It depends on your role. Direct contractors (those who contract directly with the property owner) do not need to serve a preliminary notice. Subcontractors, material suppliers, equipment lessors, and laborers not employed by the direct contractor must serve a preliminary 20-day notice within 20 days of first furnishing labor or materials. If served late, lien rights are limited to work performed within 20 days before the notice and thereafter. Always serve preliminary notices as early as possible.
A stop payment notice is served on a construction lender to require withholding of funds from the construction loan. It is useful when there is a construction loan and the general contractor is not paying subcontractors. A "bonded" stop notice (accompanied by a surety bond for 125% of the claim) requires the lender to withhold funds. The stop notice must be served before the deadline to record a mechanics lien expires. It provides an alternative method to secure payment independent of the lien.
No. Under California Business and Professions Code Section 7031, an unlicensed contractor cannot file a mechanics lien, sue for payment, or enforce any construction contract. This also applies if your license lapsed during the project or if you performed work outside your license classification. The contractor's license must be active and in good standing throughout the entire time work was performed. Verify your license status before asserting lien rights.
An owner who pays a general contractor without obtaining lien releases from subcontractors and suppliers takes the risk that those parties will file liens. The owner may be forced to pay twice - once to the general contractor and again to satisfy valid mechanics liens. This is why owners should always require conditional or unconditional lien releases with each progress payment and before making final payment. As a subcontractor, your lien is against the property regardless of whether the owner paid the GC.
You must file a lien foreclosure lawsuit in Superior Court within 90 days of recording the mechanics lien. At the time of filing, you must also record a Lis Pendens (Notice of Pending Action) against the property. The lawsuit seeks a judgment for the amount owed and an order to sell the property at foreclosure if the judgment is not paid. If you do not file the foreclosure action within 90 days, your lien becomes unenforceable and must be released.
Owners frequently raise defect claims to avoid paying. Demand a specific written description of all alleged defects. Offer to inspect and, if appropriate, cure any legitimate issues. Document your work thoroughly with photos and daily logs. For residential construction, owners must follow the Right to Repair procedures (Civil Code 895-945.5) before suing for defects, which includes giving you notice and opportunity to repair. Many defect claims are pretextual and will not withstand scrutiny in court.
You can recover attorney fees if your contract contains an attorney fee provision. Under California Civil Code Section 1717, such provisions apply reciprocally to both parties. For payment bond claims, prevailing claimants can recover attorney fees from the surety. The mechanics lien statute itself does not provide for attorney fees, so contractual provisions are important. Always include attorney fee clauses in your construction contracts.

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