In California, liens filed on private property are known as Mechanic’s Liens. When a California mechanics lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property.
In most circumstances, California does not allow mechanics liens to be filed on government owned property. However, nearly every project on government owned project is required to have a payment bond in place to protect subcontractors and suppliers. Filing a claim against the payment bond secures your claim for money in a way that is similar to filing a lien claim. In addition to the payment bond, stop notices may also be filed.
Pre-lien notices are required to be served prior to filing a California mechanics’ lien claim. Within 20 days of the commencement of work on the property, subcontractors and suppliers should provide written notice to the owner, the general contractor and the construction lender that they are performing work on the property. If the notice is served late, then the claimant can claim a California construction lien for the value of the labor or materials provided in the 20 days preceding the service of the notice and thereafter.
Prime contractors must file a California claim of lien within 60 days after a notice of completion or notice of cessation is recorded, or if no recording of completion or cessation is accomplished, within 90 days after the completion of the work of improvement. Subcontractors and materialmen must file a California claim of lien within 30 days after a notice of completion or notice of cessation is recorded, or if no recording of completion or cessation is accomplished, within 90 days after the completion of the work of improvement.
Check out our web page at www.LienItNow.com for more information about state guides and our processes.
The California has introduced a bill that would protect subcontractors from overly broad indemnification provisions. The bill, which has been passed by both houses and signed into law by the Governor, will become effective on January 2013.
California Senate Bill 474 would prohibit a contract clause that would require a subcontractor to indemnify a general contractor, construction manager, or other subcontractor for claims arsing out of those parties’ active negligence.
This bill is intended to curb the frequent practice of general contractors in including indemnity provisions in their subcontract documents that require subcontractors to defend and indemnify them from liability regardless of whether the general contractor is partially at fault. While this was technically enforceable in California, it appeared to be against public policy. In essence, such an indemnification provision would place fault at the feet of the subcontractor even if he was only 1% liable for the claim. States like New York have made such indemnification provisions void as against public policy.