Guide to California Mechanics Lien Law











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Watch this webinar to learn about how to leverage your lien rights and get paid in California. Got more questions? Get FREE expert help at https://www.levelset.com/payment-help.... • This webinar is co-led by Christopher Ng, a construction attorney at Gibbs Gidon, and Seth Bloom, Senior Director of Attorney Services at Levelset. • -What are some important construction statutes that will become effective in 2020? • The California’s consumer privacy act is a big one. If you do more than $25 million and you are collecting personal data of customers or individuals, officers, directors of customers, you've got to comply with the CCPA. • AB 1565, which has undergone a couple of iterations in the last 24 months, is direct contractor liability for subs and sub subs and sub sub subs for failure to pay wages. Increasingly general contractors are using labor code 218.7 to withhold payment from subs that cannot open their books and show payroll records and compliance with all the requirements of 218.7, so it's giving another excuse to GCs not to pay subs. • -What happens if people aren't using the most current forms set forth in construction statutes? • It depends. In cases like preliminary notices, I'm litigating a few of them right now where folks have used the old forms and we have some case law in California that says if you do not use the current UpToDate form that’s compliant with the statute, your preliminary notice is invalid. • -On a California construction job, if a GC and a sub can’t agree on the percentage of completion required for the sub to get paid, and the sub files a Mechanics Lien, will the lien be considered prematurely filed? • Typically, you have to be done with your performance to record a mechanics lien in California. So if you prematurely record your lien and you are not done, your lien may be invalid. • In general, we always encourage our clients to try to complete the project, complete their work when possible. But when it's not possible, one thing that you might consider doing before taking advantage of these remedies, especially the lien law remedy, is to declare your contract complete. In other words, issue a final deductive change order. I let the owner know that you are or the GC know that you are done on this project and you are going ahead with your mechanics leaving rights. That's something that you should talk about with your attorney because it will depend on your particular situation. • -What are the different ways I can release my lien rights in California? • You can do it through these four forms. The four forms that are probably the bane of most of your existence. The conditional and unconditional waivers are releases upon progress and final payments. These are typical in most States around the country. They take special meaning here in California. These are the ones that you are going to use every month to procure payment. And then at the very end of the project, hopefully to get your final payment if you're a sub, looking to get your final retention payment. • -What can I do if I experience slow payment or payment that doesn’t follow what the contract says? • It may justify a Mechanics Lien. With these rights is if you're not done yet and you still have work to be performed, you may not do a mechanics lien. Unless you're going to declare that your contract is over.

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