CSLB Insurance & Liens Practice Questions

1. A subcontractor begins work on a private project on March 1. To preserve lien rights, the preliminary notice must be served by:

Civil Code §8200 requires the preliminary notice to be served not later than 20 days after the claimant first furnishes labor, service, equipment, or materials, so work starting March 1 puts the deadline at March 21. (a) treats the notice as a condition of starting work; it is not, and a notice served on day one is valid but early. (b) borrows a ten-day period that appears elsewhere in construction practice, not here. (c) rounds to a month. Late service does not destroy the lien outright: under §8204 it limits the claim to work furnished in the 20 days before service and afterwards.

2. A preliminary notice on a private construction project must be served on:

§8200(a) names three recipients: the owner or reputed owner, the direct contractor to which the claimant provides work, and the construction lender if there is one. §8200(c) and (d) make that service a prerequisite to a valid lien claim, stop payment notice, or claim against a payment bond. The real exceptions run the other way from these distractors: §8200(e) excuses a laborer entirely and requires a claimant who does have a direct contract with the owner to notify only the construction lender. (b) drops the owner, whose property the lien attaches to; (c) adds the building department, which has no role in the lien scheme; and (d) confuses the preliminary notice with recording the claim of lien itself at the recorder's office.

3. After completion of a private project, a claimant has how many days to record a mechanics' lien if no Notice of Completion is filed?

If no Notice of Completion or Cessation is recorded, a mechanics' lien must be recorded within 90 days of completion of the project. This is the maximum window for lien claimants.

4. If the owner records a Notice of Completion, subcontractors and suppliers must record their mechanics' lien within:

When an owner records a Notice of Completion, subcontractors and material suppliers (who are not the direct contractor) have only 30 days to record their mechanics' lien. The prime contractor has 60 days.

5. After recording a mechanics' lien, the claimant must file a lawsuit to enforce the lien within:

A recorded mechanics' lien expires unless the claimant files a lawsuit to enforce it within 90 days of recording. Failure to sue timely renders the lien void.

6. What is the purpose of a "stop payment notice" on a private construction project?

A stop payment notice reaches money rather than land. §8520(a) lets any claimant with lien rights other than the direct contractor give the owner such a notice, §8530 lets the same claimant give one to the construction lender, and §8500 makes this chapter the exclusive route to the construction fund: no person may assert any other legal or equitable right against that fund except under a written contract with whoever holds it. §8044(a) adds that the notice may be bonded or unbonded, and a bonded notice is what compels a lender to withhold. (b) confuses it with a stop order, which Cal/OSHA or the registrar issues against the use of employee labour; nothing in a stop payment notice halts construction. (c) is the mechanics lien, the parallel remedy that does attach to the property. (d) sends the notice to an office with no role in the payment chain. §8520(b) is the trap running the other way: if the owner demands a stop payment notice and the claimant fails to give one, the claimant forfeits its lien.

7. An owner can release a recorded mechanics' lien by obtaining a lien release bond equal to:

To release a mechanics' lien from a property, the owner or contractor can record a lien release bond equal to 125% of the lien amount. This shifts the claimant's security from the property to the bond.

8. Which of the following is NOT required to be included in a mechanics' lien?

A valid mechanics' lien must include the claimant's name/address, employer/employee info, description of work/materials, amount of claim, description of the property, and owner's name. No SSN is required.