Contractor Payment and Collections in California

Anyone researching California construction payment law will encounter two different sets of section numbers, and one of them is no longer law.

The former Mechanics Lien Law occupied Civil Code sections 3082 through 3267. Senate Bill 189 repealed that entire framework and replaced it, operative July 1, 2012, with a new scheme at Civil Code sections 8000 through 9566. The recodification was largely a reorganization rather than a rewrite — much of the substance carried over — but every section number changed, along with some of the terminology.

Two vocabulary shifts matter for searching and for reading older material. What used to be called the “original contractor” is now the “direct contractor.” What used to be called a “stop notice” is now a “stop payment notice.”

A payment bond claim reaches a surety rather than the owner or the property. On public works this is often the primary remedy precisely because liens are unavailable. Note the distinction from the license bond: a contractor’s license bond under Business and Professions Code section 7071.6 is a different instrument with a different purpose, and it is not a payment bond.

This is the single most important operational point on the page, because one document protects all three remedies and missing it forfeits them together.

Civil Code section 8200 provides that before recording a lien claim, giving a stop payment notice, or asserting a claim against a payment bond, a claimant shall give preliminary notice to the owner or reputed owner, the direct contractor or reputed direct contractor to which the claimant provides work, and the construction lender or reputed construction lender if there is one. Section 8200 further provides that compliance is a necessary prerequisite to the validity of a lien claim or stop payment notice.

The deadline is short. Preliminary notice must be given not later than 20 days after the claimant first furnishes work on the work of improvement. A notice served late is not necessarily worthless — the statute limits the claim to work furnished within a defined lookback period rather than voiding rights outright — but the safe practice is to treat the 20 days as absolute and serve at the start of every job as a matter of routine, not as a response to a payment problem that has already developed.

The dedicated guide covers who must serve notice, who is excepted, and what the notice has to contain.

Two deadlines govern a mechanics lien, and they are sequential.

The first is the deadline to record the claim of lien, set by Civil Code sections 8412 and 8414 — section 8412 for direct contractors, section 8414 for other claimants. Absent a recorded notice of completion or notice of cessation, the window is generally 90 days after completion. Recording a notice of completion or cessation shortens it, and the shortened periods differ between direct contractors and other claimants. Because published sources conflict on those specific shortened figures, this page does not state them; the lien guide will, once the sections have been read against the current code.

The second is the deadline to enforce. Under Civil Code section 8460, an action to foreclose the lien must be commenced within 90 days after recording the claim of lien. Miss it and the lien expires and becomes unenforceable — recording is not the end of the process, it starts a new clock.