California Specifics

California Lien Law Basics

California has some of the most comprehensive construction payment protection laws in the country. Here's what every contractor operating in California needs to know.

6 min read

California's mechanics lien law is codified in the California Civil Code, Division 4 (sections 8000–9566). It gives contractors, subcontractors, material suppliers, laborers, and equipment lessors the right to place a lien on private property to secure payment for work performed or materials supplied. It is one of the strongest sets of contractor payment protections in the United States.

The key steps for subcontractors

Step 1 — Preliminary Notice: Serve within 20 days of first furnishing work or materials. Required for subcontractors to preserve lien rights. Step 2 — Stop Payment Notice (optional): If payment is being withheld, you can serve a stop payment notice on the owner or construction lender, which halts further disbursements until your claim is resolved. Step 3 — Mechanics Lien: Record with the county recorder's office. Must be done within 90 days of project completion, or within 60 days after the owner records a Notice of Completion or Cessation. Step 4 — Enforce the Lien: File a lawsuit to foreclose the lien within 90 days of recording.

Notice of Completion and Notice of Cessation

When an owner records a Notice of Completion with the county, it shortens the lien deadline for subcontractors to 30 days (from 90 days). Watch for these notices — they compress your timeline significantly. A Notice of Cessation is recorded when work stops for 30 or more days before the project is complete and has similar effects.

California Prompt Payment Act

California Business and Professions Code and Civil Code set strict payment deadlines: owners must pay GCs within 30 days of invoice; GCs must pay subs within 7 days of receiving payment from the owner. Late payments accrue interest at 2% per month. These are statutory rights — they apply even if your contract says otherwise.

Public vs. private projects

The mechanics lien process described above applies to private projects only. On public projects (government-owned property), you cannot file a mechanics lien. Instead, you can file a claim against the contractor's payment bond (Little Miller Act) and serve a stop payment notice on the public entity.

California construction law is complex. This article provides a general overview for educational purposes only. Consult a California licensed construction attorney for advice specific to your situation.

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