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Construction Lien

 

CALIFORNIA

1. Basics of a Construction Lien.
2. Persons Eligible to File a Lien.
3. Prerequisites.
4. Time Frame to File a Lien.
5. Enforcing a Lien.
Time Frame to File a Lien

In order to have an enforceable construction lien, any original contractor who has a direct contractual agreement with the property owner must file his/her lien within 90 calendar days from the date of “completion.”[1] If a “Notice of Completion” or “Notice of Cessation” is filed, the original contractors have 60 calendar days from the date that the “Notice of Completion” or “Notice of Cessation” was filed to file a construction lien.[2]

All other contractors (subcontractors, material suppliers, equipment renters, etc.), are also given 90 calendar days to file a construction lien.[3] If a “Notice of Completion” or “Notice of Cessation” is filed, all other contractors have 30 calendar days from the date that the “Notice of Completion” or “Notice of Cessation” was filed to file a construction lien.[4]

If a “Notice of Completion” or “Notice of Cessation” is filed improperly it can become ineffective. A Notice of Completion must be filed within 15 calendar days of the true date of completion.[5] A Notice of Cessation is only effective if the document is filed after 30 calendar days of continuous cessation of labor.[6] The property owner must also give a copy of the filed notice to the general contractor, original contractor, and any contractor that served a Preliminary Notice.[7] The notification must be sent within 10 days from the date the Notice of Completion or Cessation is filed.[8] Residential owner-occupied homes that have four units or less are exempt from having to notify the contractors of the filing of a Notice of Completion or Cessation.[9] If these strict requirements are not met, the Notice of Completion or Cessation may be invalidated and all claimants should have the entire 90 days to file a lien.

A project is deemed “complete” if any one of the followings have occurred:

  • Actual completion of the work of improvement;[10]

      or
  • The work of improvement supplied is being used or occupied by the owner or his agent accompanied by cessation of work;[11]

      or
  • A cessation of work for 60 continuous calendar days;[12]

      or
  • The filing of a Notice of Cessation provided that the notice was filed after 30 calendar days of continuous cessation of labor.[13]

Generally, the deadline to file a lien begins on the date the entire project is complete and not the date a particular contractor has finished his/her work.[14] For example, a framing contractor can finish his job very early in the project, but his 90 day deadline does not begin until the date that the last contractor finished his/her work in the whole project. However, this does not mean that he/she cannot file a lien before the entire job is complete. The contractor can file his/her lien anytime after his/her own work is complete, but before the statutory deadlines. Below is an example:

    Example: XYZ Construction is a framing contractor that started work on March 1, 2005. They are only contracted for their expert framing services and complete their work on May 1, 2005. XYZ Construction was promised that they would be paid soon, but never received payment. One year later, on July 10, 2006 XYZ Construction files a lien even though the overall project is still ongoing.

    XYZ Construction is still within the time frame because they can file their lien anytime within the statutory deadlines. Let’s assume that the final date of completion of the entire project is October 1, 2006. If no Notice of Completion or Notice of Cessation was filed, the latest for any contractor to file a lien is 90 days from October 1, 2006. Assuming that every month has 30 days, the last day any contractor can file a lien is December 1, 2006.

The term “days” are calculated by calendar days and NOT business days unless otherwise stated. Time is calculated by excluding the first day, and including the last, unless the last day is a holiday or weekend, then it is also excluded.[15]


List of Cited Statutes and Case Laws for further research
[1] California Civil Code § 8412.
[2] Ibid.
[3] California Civil Code § 8414.
[4] Ibid.
[5] California Civil Code § 8188.
[6] California Civil Code § 8180.
[7] California Civil Code § 8190.
[8] Ibid.
[9] Ibid.
[10] California Civil Code § 8180.
[11] Ibid.
[12] Ibid.
[13] Ibid.
[14] Century Superior Gunite, Inc. v. Rodriguez, 118 Cal.App.3d Supp. 12, 173 Cal.Rptr. 661 (1981).
[15] California Code of Civil Procedure §§ 12, 12(a).


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