Insurance & LiensQuestion 1572 of 1632

A claim on a private-project payment bond generally requires the claimant to have:

a.Posted a bond of 125 percent of the claim before making it
b.Given the preliminary notice lien rights require, unless excused
c.Recorded a mechanics lien against the property before claiming
d.Obtained a judgment against the direct contractor before claiming

Explanation

Under Civil Code §8600 et seq. the right to recover on a private-work payment bond tracks the notice conditions for a mechanics lien, so a claimant who had to give a preliminary notice must have given it — laborers and others excused from notice are excused here too. (a) imports the §8532 bond that accompanies a stop payment notice to a lender. (c) treats the remedies as sequential when they are alternative; a claimant may go against the bond without ever recording. (d) would make the bond useless, since its value is being payable without first litigating to judgment.

Law Reference: Civil Code §8600 et seq.

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