As a contractor, your livelihood relies on the constant cash flow from your work. Unfortunately, there can be a time when you fail to receive a paycheck on time. Understand that the mechanics lien is a powerful tool that can help you protect your rights. While true, there are two significant deadlines you need to remember.
Sending a Preliminary Notice
Subcontractors have the right to send a Preliminary Notice to a property owner within 20 days following the initial provision of labor or materials. This informs the owner that they can file a lien later if they do not receive payment. Direct contractors only need to serve this notice if there is a construction lender.
Following this deadline is important because it covers 100% of the work you do on the project, from start to finish. If you send the notice late, the law only allows you to claim a lien for the work done in the 20 days preceding the date you served the notice, plus any work after.
For instance, you started work on January 1st but forgot to send the notice until February 10th. Your lien will only cover work done from January 21st onward. You cannot recover payment for the work done from January 1st to 20th through a mechanics lien.
Recording a lien on time
After completing the project, you have a 90-day deadline for recording a lien. However, this window is substantially compressed if the owner elects to record a Notice of Completion or Notice of Cessation:
- If you are the direct contractor, you have 60 days to record your claim.
- If you are the subcontractor, you have 30 days to record your claim.
If the owner did not file a notice, the 90-day deadline applies. Missing these windows can result in losing your right to a mechanics lien.
Mitigating risk through compliance
With California’s strict laws on mechanics liens, it is your responsibility to track time. Consider setting reminders on your calendar to notify you when deadlines are near. If you want to ensure compliance with lien statutes, seeking legal advice can help you get the clarity you need.