A Tune Up for Mechanic's Lien Laws

Pursuant to SB 189 and effective July 1, 2012, all of the existing California mechanic's lien, stop notice and payment bond statutes will be repealed and replaced. The statutes, formerly Civil Code sections 3082-3267, have been recodified and can now be found at Civil Code sections 8000, et seq. 

While the statutes have been relocated and renumbered, many of the provisions remain substantively the same. Some of the major changes that you should be aware of are as follows: 

Completion: "Completion" of the work of improvement has always triggered the deadline for recording a mechanic's lien. Under new section 8180, however, acceptance by the owner has been eliminated as one of the occurrences that constitutes "completion" for a private works project. The other definitions of "completion" remain unchanged. 

Preliminary Notice: Under the old law, a "Preliminary 20-Day Notice" had to be served by lien claimants to preserve their lien rights. Under the new statute, there is new language for the preliminary notice and two different forms depending on whether the work is public or private. 

Waivers and Releases: Civil Code section 3262 contained the language to be used for conditional and unconditional waivers and releases on progress and final payments. The language has been modified slightly, and as a result a new form must be used. The new language can be found in section 8132, et seq. 

Notice of Mechanic's Lien: Mechanic's liens may not be recorded unless they are accompanied by proof of service of the lien on the property owner. Under the new law, failure to give the required notice renders the lien invalid. 

New Terms and Phrases: In an effort to rid the statutes of arcane language, the legislature reworded some of the terms and phrases. "Stop notice" is now referred to as a "stop payment notice." A 20-day preliminary notice is now referred to as a "preliminary notice." "Original contractor" has been replaced by "direct contractor," while "materialman" has been replaced with "material supplier." 

These are just a few of the changes to the statutory scheme caused by SB 189.