Insurance & LiensQuestion 578 of 1632

Which statement BEST captures the practical difference between a mechanics' lien and a stop payment notice on a private project?

a.A lien is recorded against the licence; a notice against the property
b.Both attach to the property, with identical steps and deadlines
c.A lien attaches to the property; a notice intercepts the funds
d.The notice replaces the lien once payment has been received

Explanation

The two remedies chase different assets. A mechanics lien under §8400 attaches to the real property itself, in the amount §8430(a) fixes — the lesser of the reasonable value of the work and the price agreed — and it is enforced by an action brought within 90 days of recording under §8460(a). A stop payment notice goes after money instead: §8520(a) lets a claimant with lien rights other than the direct contractor give the notice to the owner, §8530 lets it go to the construction lender, and §8500 makes this chapter the exclusive route to the construction fund, so nobody may assert any other legal or equitable right against that fund except under a written contract with whoever holds it. (a) has it exactly backwards, and invents a lien against a licence, which does not exist in any form. (b) ignores that the deadlines differ as well as the targets — §8412 and §8414 govern recording a lien and say nothing about giving a notice. (d) invents a substitution: payment ends both remedies, and neither one converts into the other.

Law Reference: Civil Code §8400; §8430(a); §8500; §8520(a); §8530; §8412; §8414; §8460(a)

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