Lien Law Information

Lien laws are designed to protect labor, subcontractors and suppliers from general contractors who are paid by the owner but do not pay those who worked on the property. The basic feature of lien law is it allows the person who has not been paid to place a claim against the property even though they (the labor, sub or supplier) did not have a direct contract with the owner. Lien rights are not automatic. There are things you must do and there are mandated time lines. Here are the basic features of the lien law in California:

• Different forms and rules for public and private projects
• You must let the owner know you are working on the project (prelien)
• You must place a lien within a certain time period
• You must perfect (move towards foreclosure) a lien within a certain time period

Liens have specific timelines depending on your relationship to the owner and the type of project (public or private). These are too complex to list here, however there are a few things you can do to protect your rights.

Step by step here is the formula for success with liens:

1. Get a supply of public and private project Pre-lien forms
2. At the time you sign the contract fill out the Pre-lien form and mail by certified, return receipt, mail. Make this an automatic new job procedure!
3. If you are not paid, or the work ceases, respond quickly by seeking advice. As a supplier or subcontractor your rights to place a lien expire in 60 days after completion or cessation under most circumstances. As a general or primary contractor the time limit is 30 days. Limits may change with circumstances.
4. Be careful of timelines on public projects. If your lien (actually a stop notice) arrives after the money is gone - you have nothing to collect.
5. When in doubt, lien - they are easy to remove but impossible to place after the time has expired.

Liens are effective because they force the owner and lender, if there is one, to become involved in making sure you are paid.

Get the forms on our forms page!

Download our Lien Law Crash Course

Consult and attorney if you have any questions about any of the above.