California’s Revised Mechanics Lien Law: Changes in Rights and Obligations of Construction Lenders

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California’s mechanics lien law provides various rights and remedies to persons who provide labor, service, equipment or material to real property, including the right to record a mechanics lien on the improved work for both site work and construction, the right to recover construction funds from a construction lender pursuant to a stop notice, and the right to recover against a bond guaranteeing payment in the event of default.

The law has been completely rewritten. A few of the provisions took effect on January 1, 2011, but the vast majority became operative on July 1, 2012. The comprehensive revision derives from a 1999 request to the California Law Revision Commission (“Commission”) from the Chair and Vice Chair of the Assembly Judiciary Committee asking that the Commission study the mechanics lien law. Ultimately, the Commission published its recommendation, encompassed in a report covering more than 400 pages. The recommendation, with various changes, was subsequently enacted into law. Civil Code Sections 8000-8154 cover works of improvement generally. Civil Code Sections 8160- 8848 cover private works of improvement. Civil Code Sections 9000-9566 cover public works of improvement. Various other provisions are scattered elsewhere throughout the California codes.

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Published In: Administrative Agency Updates, Civil Remedies Updates, Construction Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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