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CALIFORNIA CONSTITUTION
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ARTICLE XIV LABOR RELATIONS § 3 Mechanics Liens
CIVIL CODE TITLE 14 LIEN CHAPTER 8 DESIGN PROFESSIONALS LIENS 3081.1 Definition TITLE 15 WORKS OF IMPROVEMENT CHAPTER 1 GENERAL DEFINITIONS 3082 Chapter Governs Construction of Title CHAPTER 2 MECHANICS LIENS ARTICLE 1 APPLICATION OF CHAPTER 3109 Application ARTICLE 2 WHO IS ENTITLED TO LIEN 3110 Person Who Have Lien Rights ARTICLE 3 CONDITIONS TO ENFORCING A LIEN 3114 Preliminary Twenty-Day Notice ARTICLE 4 AMOUNT OF LIEN 3123 Amount of Lien; Charges ARTICLE 5 PROPERTY SUBJECT TO LIEN 3128 Liens Attach to Land Including Space for Convenient Use and Occupations ARTICLE 6 PRIORITIES 3134 Claim of Lien Takes Priority from Commencement of Work of Improvement ARTICLE 7 ENFORCEMENT OF LIEN 3143 Release Bond CHAPTER 3 STOP NOTICES FOR PRIVATE WORKS OF IMPROVEMENT ARTICLE 1 APPLICATION OF CHAPTER 3156 Chapter does not Apply to Public Works ARTICLE 2 WHO IS ENTITLED TO SERVE A STOP NOTICE AND BONDED STOP NOTICE 3158 Claimants Other Than Original Contractor; Written Demand for Stop Notice; Forfeiture of Mechanics Lien Right ARTICLE 3 CONDITIONS TO VALID SERVICE OF STOP NOTICE AND BONDED STOP NOTICE 3160 Preliminary Twenty-Day Notice; Time for Service of Stop Notice ARTICLE 4 EFFECT OF STOP NOTICE AND BONDED STOP NOTICE 3161 Duty of Owner to Withhold; Payment Bond ARTICLE 5 PRIORITIES 3166 Stop Notice Takes Priority Over Assignment of Construction Loan Funds ARTICLE 6 RELEASE OF STOP NOTICE OR BONDED STOP NOTICE 3171 Release Bond ARTICLE 7 ENFORCEMENT OF RIGHTS ARISING FROM STOP NOTICE AND BONDED STOP NOTICE 3172 Action to Enforce Stop Notice Claim: Commencement; Five-Day Notice of Commencement CHAPTER 4 STOP NOTICE FOR PUBLIC WORK ARTICLE 1 APPLICATION OF CHAPTER 3179 Chapter Applies Only to Public Work ARTICLE 2 WHO IS ENTITLED TO SERVE A STOP NOTICE 3181 Authorized Claimants ARTICLE 3 CONDITIONS TO SERVICE OF STOP NOTICE 3183 Preliminary Twenty-Day Notice (Public Work) ARTICLE 4 PRIORITIES 3190 Claims Paid Pro Rata ARTICLE 5 RELEASE OF STOP NOTICE 3196 Release Bond ARTICLE 6 ENFORCEMENT OF RIGHTS ARISING FROM STOP NOTICE 3210 Statute of Limitations; Commencement of Action CHAPTER 5 GENERAL PROVISIONS RELATING TO BONDS ARTICLE 1 CONSTRUCTION OF AND TERMS AND CONDITIONS OF BONDS 3225 No Exoneration or Release by Changes or Rescission CHAPTER 6 PAYMENT BOND FOR PRIVATE WORKS ARTICLE 1 PROVISION FOR AND EFFECT OF FILING CONTRACT AND PAYMENT BOND 3235 Recording Payment Bond Before Work has Commenced; Restriction of Recovery ARTICLE 2 CONDITIONS TO ACTION ON PAYMENT BOND 3239 Recording Payment Bond; Statute of Limitations CHAPTER 7 PAYMENT BOND FOR PUBLIC WORKS 3247 Payment Bond Requirement CHAPTER 8 MISCELLANEOUS PROVISIONS 3258 Recording Documents Required by this Chapter TITLE 16 GENERAL PROVISIONS 3268 Waiver ARTICLE XIV LABOR RELATIONS § 3 Mechanics Liens Mechanics, persons furnishing materials, artisans, and laborers of every class, shall have a lien upon the property upon which they have bestowed labor or furnished material for the value of such labor done and material furnished; and the Legislature shall provide, by law, for the speedy and efficient enforcement of such liens. CIVIL CODE TITLE 14 LIEN CHAPTER 8 DESIGN PROFESSIONALS LIENS 3081.1 Definition For purposes of this chapter, design professional means any certificated architect, registered professional engineer, or licensed land surveyor who furnishes services pursuant to a written contract with a landowner for the design, engineering, or planning of a work of improvement. Except as otherwise expressly provided, the definition in this section does not apply to, or limit or expand the meaning of, provisions of law other than this chapter. 3081.2 Lien on Real Property for Which Work of Improvement is Planned to be Constructed A design professional shall, from the date of recordation pursuant to Section 3081.3, have a lien upon the real property for which the work of improvement is planned to be constructed, notwithstanding the absence of commencement of actual construction of the planned work of improvement, if the landowner contracted for the design professional’s services and is also the owner of the real property at the time of recordation of the lien. The lien of the design professional shall be for the amount of the design professional’s fee for any services rendered prior to commencement of the work of improvement or the reasonable value of those services, whichever is less. The amount of the lien shall be reduced by the amount of any deposit or prior payments, as specified by a written contract entered into by the design professional and by the landowner or his or her agent. However, no lien shall arise pursuant to this chapter, and a design professional may not record a notice of lien pursuant to subdivision (c) of Section 3081.3, unless a building permit or other governmental approval in furtherance of the work of improvement has been obtained in connection with or utilizing the services rendered by the design professional. 3081.3 Conditions to Lien; Preliminary Notice; Notice of Lien In order for the design professional to be entitled to a lien pursuant to Section 3081.2, all of the following shall occur: 3081.4 Expiration of Lien; Release (a) Upon recordation of the notice of lien pursuant to subdivision (c) of Section 3081.3, a lien is created in favor of the named design professional. 3081.5 Enforcement Any design professionals’ lien perfected pursuant to this chapter shall be enforced pursuant to the provisions contained in Article 7 (commencing with Section 3143) of Chapter 2 of Title 15. 3081.6 Mechanics Lien Not Affected This chapter does not affect the ability of a design professional to obtain a mechanic’s lien pursuant to Title 15 (commencing with Section 3082) of this part. 3081.7 Time for Recording A design professional shall record a notice of lien pursuant to subdivision (c) of Section 3081.3 no later than 90 days after the design professional knows or has reason to know that the landowner is not commencing the work of improvement. 3081.8 Other Remedies Not Affected The lien of a design professional perfected pursuant to this chapter shall not affect the ability of the design professional to pursue other remedies. 3081.9 Priorities; Construction Loans (a) No lien created by this chapter shall affect or take priority over the interest of record of a purchaser, lessee, or encumbrancer, if the interest of the purchaser, lessee, or encumbrancer in the real property was duly recorded before recordation of the design professionals’ lien. 3081.10 Single Family Dwellings TITLE 15 WORKS OF IMPROVEMENT CHAPTER 1 GENERAL DEFINITIONS 3082 Chapter Governs Construction of Title Unless the context otherwise requires, the provisions in this chapter govern the construction of this title. 3083 Bonded Stop Notice Bonded stop notice means a stop notice, given to any construction lender, accompanied by a bond with good and sufficient sureties in a penal sum equal to 11/4 times the amount of such claim conditioned that if the defendant recovers judgment in an action brought on such verified claim or on the lien filed by the claimant, the claimant will pay all costs that may be awarded against the owner, original contractor, construction lender, or any of them, and all damages that such owner, original contractor, or construction lender may sustain by reason of the equitable garnishment effected by the claim or by reason of the lien, not exceeding the sum specified in the bond. To be effective such bonded stop notice shall be delivered to the manager or other responsible officer or person at the office of the construction lender or must be sent to such office by registered or certified mail. If such notice is delivered or sent to any institution or organization maintaining branch offices, it shall not be effective unless delivered or sent to the office or branch administering or holding such construction funds. 3084 Claim of Lien (a) Claim of lien means a written statement, signed and verified by the claimant or by the claimant’s agent, containing all of the following: 3085 Claimant Claimant means any person entitled under this title to record a claim of lien, to give a stop notice in connection with any work of improvement, or to recover on any payment bond, or any combination of the foregoing. 3086 Completion Completion means, in the case of any work of improvement other than a public work, actual completion of the work of improvement. Any of the following shall be deemed equivalent to a completion: 3087 Construction Lender Construction lender means any mortgagee or beneficiary under a deed of trust lending funds with which the cost of the work of improvement is, wholly or in part, to be defrayed, or any assignee or successor in interest of either, or any escrow holder or other party holding any funds furnished or to be furnished by the owner or lender or any other person as a fund from which to pay construction costs. 3088 Contract 3089 Laborer Laborer means any person who, acting as an employee, performs labor upon or bestows skill or other necessary services on any work of improvement. 3090 Materialmen Materialman means any person who furnishes materials or supplies to be used or consumed in any work of improvement. 3092 Notice of Cessation Notice of cessation means a written notice, signed and verified by the owner or his agent, containing all of the following: The notice of cessation shall be recorded in the office of the county recorder of the county in which the site is located and shall be effective only if there has been a continuous cessation of labor for at least 30 days prior to such recording. 3093 Notice of Completion Notice of completion means a written notice, signed and verified by the owner or his agent, ontaining The notice of completion shall be recorded in the office of the county recorder of the county in which the site is located, within 10 days after such completion. A notice of completion in otherwise proper form, verified and containing the information required by this section shall be accepted by the recorder for recording and shall be deemed duly recorded without acknowledgment. If there is more than one owner, any notice of completion signed by less than all of such co-owners shall recite the names and addresses of all of such co-owners; and provided further, that any notice of completion signed by a successor in interest shall recite the names and addresses of his transferor or transferors. For the purpose of this section, owner is defined as set forth in subdivision (g) of Section 3092. 3094 Notice of Nonresponsibility Notice of nonresponsibility means a written notice, signed and verified by a person owning or claiming an interest in the site who has not caused the work of improvement to be performed, or his agent, containing all of the following: Within 10 days after the person claiming the benefits of nonresponsibility has obtained knowledge of the work of improvement, the notice provided for in this section shall be posted in some conspicuous place on the site. Within the same 10-day period provided for the posting of the notice, the notice shall be recorded in the office of the county recorder of the county in which the site or some part thereof is located. 3095 Original Contractor Original contractor means any contractor who has a direct contractual relationship with the owner. 3096 Payment Bond Payment bond means a bond with good and sufficient sureties that is conditioned for the payment in full of the claims of all claimants and that also by its terms is made to inure to the benefit of all claimants so as to give these persons a right of action to recover upon this bond in any suit brought to foreclose the liens provided for in this title or in a separate suit brought on the bond. An owner, original contractor, or a subcontractor may be the principal upon any payment bond. 3097 Preliminary Twenty-Day Notice (Private Work) Preliminary 20-day notice (private work) means a written notice from a claimant that is given prior to the recording of a mechanic’s lien, prior to the filing of a stop notice, and prior to asserting a claim against a payment bond, and is required to be given under the following circumstances: NOTICE TO PROPERTY OWNER If bills are not paid in full for the labor, services, equipment, or materials furnished or to be furnished, a mechanic’s lien leading to the loss, through court foreclosure proceedings, of all or part of your property being so improved may be placed against the property even though you have paid your contractor in full. You may wish to protect yourself against this consequence by (1) requiring your contractor to furnish a signed release by the person or firm giving you this notice before making payment to your contractor or (2) any other method or device that is appropriate under the circumstances. (6) If the notice is given by a subcontractor who is required pursuant to a collective bargaining agreement to pay supplemental fringe benefits into an express trust fund described in Section 3111, the notice shall also contain the identity and address of the trust fund or funds. If an invoice for materials contains the information required by this section, a copy of the invoice, transmitted in the manner prescribed by this section shall be sufficient notice. A certificated architect, registered engineer, or licensed land surveyor who has furnished services for the design of the work of improvement and who gives a preliminary notice as provided in this section not later than 20 days after the work of improvement has commenced shall be deemed to have complied with subdivisions (a) and (b) with respect to architectural, engineering, or surveying services furnished, or to be furnished. (d) The preliminary notice referred to in subdivisions (a) and (b) shall be given not later than 20 days after the claimant has first furnished labor, service, equipment, or materials to the jobsite. If labor, service, equipment, or materials have been furnished to a jobsite by a claimant who did not give a preliminary notice, that claimant shall not be precluded from giving a preliminary notice at any time thereafter. The claimant shall, however, be entitled to record a lien, file a stop notice, and assert a claim against a payment bond only for labor, service, equipment, or material furnished within 20 days prior to the service of the preliminary notice, and at any time thereafter. Where the notice is required to contain the information set forth in paragraph (6) of subdivision (c), a failure to give the notice, including that information, that results in the filing of a lien, claim on a payment bond, or the delivery of a stop notice by the express trust fund to which the obligation is owing constitutes grounds for disciplinary action by the Registrar of Contractors against the subcontractor if the amount due the trust fund is not paid. If there is no known construction lender, that fact shall be noted in the designated space. Any failure to indicate the name and address of the construction lender on the application, however, shall not relieve any person from the obligation to give to the construction lender the notice required by this section. (j) A mortgage, deed of trust, or other instrument securing a loan, any of the proceeds of which may be used for the purpose of constructing improvements on real property, shall bear the designation Construction Trust Deed prominently on its face and shall state all of the following: (1) the name and address of the lender, and the name and address of the owner of the real property described in the instrument, and (2) a legal description of the real property which secures the loan and, if known, the street address of the property. The failure to be so designated or to state any of the information Failure to provide this information on this instrument when recorded shall not relieve persons required to give preliminary notice under this section from that duty. The county recorder of the county in which the instrument is recorded shall indicate in the general index of the official records of the county that the instrument secures a construction loan. (k) Every contractor and subcontractor who is required pursuant to a collective bargaining agreement to pay supplementary fringe benefits into an express trust fund described in Section 3111, and who has failed to do so shall cause to be given to the trust fund and to the construction lender, if any, or to the reputed construction lender, if any, not later than the date the payment due to the trust fund became delinquent, a written notice containing all of the following: Failure to give this notice shall constitute grounds for disciplinary action by the Registrar of Contractors. 3097.1 Proof of Service of Preliminary Notice 3098 Preliminary Twenty-Day Notice (Public Work) Preliminary 20-day notice (public work) means a written notice from a claimant that was given prior to the assertion of a claim against a payment bond, or the filing of a stop notice on public work, and is required to be given under the following circumstances: 3099 Public Entity Public entity means the state, Regents of the University of California, a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the state. 3100 Public Work Public work means any work of improvement contracted for by a public entity. 3101 Site Site means the real property upon which the work of improvement is being constructed or performed. 3102 Site Improvement Site improvement means the demolishing or removing of improvements, trees, or other vegetation located thereon, or drilling test holes or the grading, filling, or otherwise improving of any lot or tract of land or the street, highway, or sidewalk in front of or adjoining any lot or tract of land, or constructing or installing sewers or other public utilities therein, or constructing any areas, vaults, cellars, or rooms under said sidewalks or making any improvements thereon. 3103 Elements of Stop Notice; Service Stop notice means a written notice, signed and verified by the claimant or his or her agent, stating in general terms all of the following: The notice, in the case of any work of improvement other than a public work, shall be delivered to the owner personally or left at his or her residence or place of business with some person in charge, or delivered to his or her architect, if any, if the notice is served upon a construction lender, holding construction funds and maintaining branch offices, it shall not be effective as against the construction lender unless given to or served upon the manager or other responsible officer or person at the office or branch thereof administering or holding the construction funds. The notice, in the case of any public work for the state, shall be filed with the director of the department which let the contract and, in the case of any other public work, shall be filed in the office of the controller, auditor, or other public disbursing officer whose duty it is to make payments under the provisions of the contract, or with the commissioners, managers, trustees, officers, board of supervisors, board of trustees, common council, or other body by whom the contract was awarded. No stop notice shall be invalid by reason of any defect in form if it is sufficient to substantially inform the owner of the information required. Any stop notice may be served by registered or certified mail with the same effect as by personal service. 3104 Subcontractor Subcontractor means any contractor who has no direct contractual relationship with the owner. 3105 Subdivision Subdivision means a work of improvement consisting of two or more separate residential units or two or more buildings, mining claims, or other improvements owned or reputed to be owned by the same person or on which the claimant has been employed by the same person. A separate residential unit means one residential structure, together with any garage or other improvements appurtenant thereto. 3106 Work of Improvement Work of improvement includes but is not restricted to the construction, alteration, addition to, or repair, in whole or in part, of any building, wharf, bridge, ditch, flume, aqueduct, well, tunnel, fence, machinery, railroad, or road, the seeding, sodding, or planting of any lot or tract of land for landscaping purposes, the filling, leveling, or grading of any lot or tract of land, the demolition of buildings, and the removal of buildings. Except as otherwise provided in this title, work of improvement means the entire structure or scheme of improvement as a whole. CHAPTER 2 MECHANICS LIENS ARTICLE 1 APPLICATION OF CHAPTER 3109 Application This chapter does not apply to any public work. ARTICLE 2 WHO IS ENTITLED TO LIEN 3110 Persons Who Have Lien Rights Mechanics, materialmen, contractors, subcontractors, lessors of equipment, artisans, architects, registered engineers, licensed land surveyors, machinists, builders, teamsters, and draymen, and all persons and laborers of every class performing labor upon or bestowing skill or other necessary services on, or furnishing materials or leasing equipment to be used or consumed in or furnishing appliances, teams, or power contributing to a work of improvement shall have a lien upon the property upon which they have bestowed labor or furnished materials or appliances or leased equipment for the value of such labor done or materials furnished and for the value of the use of such appliances, equipment, teams, or power whether done or furnished at the instance of the owner or of any person acting by his authority or under him as contractor or otherwise. For the purposes of this chapter, every contractor, subcontractor, sub-subcontractor, architect, builder, or other person having charge of a work of improvement or portion thereof shall be held to be the agent of the owner. 3111 Fringe Benefit Trusts For the purposes of this chapter, an express trust fund established pursuant to a collective bargaining agreement to which payments are required to be made on account of fringe benefits supplemental to a wage agreement for the benefit of a claimant on particular real property shall have a lien on such property in the amount of the supplemental fringe benefit payments owing to it pursuant to the collective bargaining agreement. 3111.5 Written Statement from Fringe Benefit Trust to Subcontractor (a) Every trust fund as described in Section 3111 shall, upon written demand by a subcontractor, give to the subcontractor in person, or by first-class mail, addressed to the address of the subcontractor as stated on the demand, within five working days of the receipt of the demand, a written statement which shall contain the following information: 3112 Persons Who Furnish Site Improvements Have Lien Rights Any claimant who, at the instance or request of the owner (or any other person acting by his authority or under him, as contractor or otherwise) of any lot or tract of land, has made any site improvement has a lien upon such lot or tract of land for work done or materials furnished. ARTICLE 3 CONDITIONS TO ENFORCING A LIEN 3114 Preliminary Twenty-Day Notice A claimant shall be entitled to enforce a lien only if he has given the preliminary 20-day notice (private work) in accordance with the provisions of Section 3097, if required by that section, and has made proof of service in accordance with the provisions of Section 3097.1. 3115 Original Contractor: Sixty Days After Notice of Completion Each original contractor, in order to enforce a lien, must record his claim of lien after he completes his contract and before the expiration of (a) 90 days after the completion of the work of improvement as defined in Section 3106 if no notice of completion or notice of cessation has been recorded, or (b) 60 days after recordation of a notice of completion or notice of cessation. 3116 Claimant Other Than Original Contractor: Thirty Days After Notice of Completion Each claimant other than an original contractor, in order to enforce a lien, must record his claim of lien after he has ceased furnishing labor, services, equipment, or materials, and before the expiration of (a) 90 days after completion of the work of improvement if no notice of completion or cessation has been recorded, or (b) 30 days after recordation of a notice of completion or notice of cessation. 3117 Completion of Separate Original Contract Where the work of improvement is not made pursuant to one original contract for the work of improvement but is made in whole or in part pursuant to two or more original contracts, each covering a particular portion of the work of improvement, the owner may, within 10 days after completion of any such contract for a particular portion of the work of improvement, record a notice of completion. If such notice of completion be recorded, notwithstanding the provisions of Sections 3115 and 3116, the original contractor under the contract covered by such notice must, within 60 days after recording of such notice, and any claimant under such contract other than the original contractor must, within 30 days after the recording of such notice of completion, record his claim of lien. If such notice is not recorded, then the period for recording claims of lien shall be as provided for in Sections 3115 and 3116. 3118 Willful Inclusion of Items not Furnished; Forfeiture Any person who shall willfully include in his claim of lien labor, services, equipment, or materials not furnished for the property described in such claim shall thereby forfeit his lien. ARTICLE 4 AMOUNT OF LIEN 3123 Amount of Lien; Charge (a) The liens provided for in this chapter shall be direct liens, and shall be for the reasonable value of the labor, services, equipment, or materials furnished or for the price agreed upon by the claimant and the person with whom he or she contracted, whichever is less. The lien shall not be limited in amount by the price stated in the contract as defined in Section 3088, except as provided in Sections 3235 and 3236 and in subdivision (c) of this section. 3124 Services and Materials not Included in Original Contract In any case where the claimant was employed by a contractor or subcontractor, his claim of lien shall not extend to any labor, services, equipment, or materials not included in the contract between the owner and original contractor or any modification thereof, if the claimant had actual knowledge or constructive notice of the contract as defined in Section 3088 or any such modification before he furnished such labor, service, equipment, or materials. The filing of a contract for a work of improvement or of a modification of such contract with the county recorder of the county where the property is situated, before the commencement of work, shall be equivalent to the giving of actual notice of the provisions thereof by the owner to all persons performing work or furnishing materials thereunder. ARTICLE 5 PROPERTY SUBJECT TO LIEN 3128 Liens Attach to Land Including Space for Convenient Use and Occupation The liens provided for in this chapter shall attach to the work of improvement and the land on which it is situated together with a convenient space about the same or so much as may be required for the convenient use and occupation thereof, if at the commencement of the work or of the furnishing of the materials for the same, the land belonged to the person who caused such work of improvement to be constructed, but if such person owned less than a fee simple estate in such land then only his interest therein is subject to such lien, except as provided in Section 3129. 3129 Notice of Nonresponsibility Protects Against Liens Suffered by Tenants Every work of improvement constructed upon any land and all work or labor performed or materials furnished in connection therewith with the knowledge of the owner or of any person having or claiming any estate therein shall be held to have been constructed, performed, or furnished at the instance of such owner or person having or claiming any estate therein and such interest shall be subject to any lien recorded under this chapter unless such owner or person having or claiming any estate therein shall give a notice of nonresponsibility pursuant to Section 3094. 3130 Lien Against Two or More Buildings should Designate Amount Due on Each In every case in which one claim is filed against two or more buildings or other works of improvement owned or reputed to be owned by the same person or on which the claimant has been employed by the same person to do his work or furnish his materials, whether such works of improvement are owned by one or more owners, the person filing such claim must at the same time designate the amount due to him on each of such works of improvement; otherwise the lien of such claim is postponed to other liens. If such claimant has been employed to furnish labor or materials under a contract providing for a lump sum to be paid to him for his work or materials on such works of improvement as a whole, and such contract does not segregate the amount due for the work done and materials furnished on such works of improvement separately, then such claimant, for the purposes of this section, may estimate an equitable distribution of the sum due him over all of such works of improvement based upon the proportionate amount of work done or materials furnished upon such respective works of improvement. The lien of such claimant does not extend beyond the amount designated as against other creditors having liens, by judgment, mortgage, or otherwise, upon either such works of improvement or upon the land upon which the same are situated. For all purposes of this section, if there is a single structure on more than one parcel of land owned by one or more different owners, it shall not be the duty of the claimant to segregate the proportion of material or labor entering into the structure on any one of such parcels; but upon the trial thereof the court may, when it deems it equitable so to do, distribute the lien equitably as between the several parcels involved. 3131 Residential Units Considered Separate Works of Improvement If a work of improvement consists in the construction of two or more separate residential units, each such unit shall be considered a separate work of improvement, and the time for filing claims of lien against each such residential unit shall commence to run upon the completion of each such residential unit. A separate residential unit means one residential structure, including a residential structure containing multiple condominium units, together with any common area, or any garage or other improvements appurtenant thereto. The provisions of this qualification shall not impair any rights conferred under the provisions of Section 3112 and 3130. Materials delivered to or upon any portion of such entire work of improvement or furnished to be used in such entire work of improvement and ultimately used or consumed in one of such separate residential units shall, for all the purposes of this title, be deemed to have been furnished to be used or consumed in the separate residential unit in which the same shall have been actually used or consumed; provided, however, that if the claimant is unable to segregate the amounts used on or consumed in such separate units, he shall be entitled to all the benefits of Section 3130. For purposes of this section and notwithstanding any other provision of this chapter, the completion of a residential structure containing multiple condominium units, together with any common area, or any garage or other improvements appurtenant thereto, and only such residential structure, shall not operate in any manner to impair the rights of a lien claimant entitled to a lien pursuant to Section 3111, if the claim of lien is recorded in the manner prescribed by this chapter within 120 days of the completion of the residential structure. ARTICLE 6 PRIORITIES 3134 Claim of Lien Takes Priority from Commencement of Work of Improvement The liens provided for in this chapter (other than with respect to site improvements) are, subject to the exception in Section 3138, preferred to any lien, mortgage, deed of trust, or other encumbrance upon the work of improvement and the site, which attaches subsequent to the commencement of the work of improvement, and also to any lien, mortgage, deed of trust, or other encumbrance of which the claimant had no notice and which was unrecorded at the time of commencement of the work of improvement. 3135 Separate Contract for Site Improvements (Offsite Improvements) If any site improvement is provided for in a separate contract from any contract with respect to the erection of residential units or other structures, then the site improvement shall be considered a separate work of improvement and the commencement thereof shall not constitute a commencement of the work of improvement consisting of the erection of any residential unit or other structure. 3136 Optional Advances by Construction Lender A mortgage or deed of trust which would be prior to the liens provided for in this chapter to the extent of obligatory advances made thereunder in accordance with the commitment of the lender shall also be prior to the liens provided for in this chapter as to any other advances, secured by such mortgage or deed of trust, which are used in payment of any claim of lien which is recorded at the date or dates of such other advances and thereafter in payment of costs of the work of improvement. Such priority shall not, however, exceed the original obligatory commitment of the lender as shown in such mortgage or deed of trust. 3137 Priority of Liens for Site Improvements over Deed of Trust Securing Construction Loan The liens provided for in Section 3112 with respect to site improvements are, subject to the exception in Section 3139, preferred to (a) any mortgage, deed of trust, or other encumbrance which attaches subsequent to the commencement of the site improvement work; and (b) any mortgage, deed of trust, or other encumbrance of which the claimant had no notice and which was unrecorded at the time of the commencement of such site improvement; and (c) any mortgage, deed of trust, or other encumbrance recorded before the commencement of the site improvement work which was given for the sole or primary purpose of financing such site improvements, unless the loan proceeds are, in good faith, placed in the control of the lender under a binding agreement with the borrower to the effect that such proceeds are to be applied to the payment of claims of claimants and that no portion of such proceeds will be paid to the borrower in the absence of satisfactory evidence that all such claims have been paid or that the time for recording claims of liens has expired and no such claims have been recorded. 3138 Payment Bond to Secure Priority of Trust Deed If the holder of any mortgage or deed of trust which is subordinate pursuant to Section 3134 to any lien, shall procure a payment bond as defined in Section 3096 in an amount not less than 75 percent of the principal amount of such mortgage or deed of trust, which bond refers to such mortgage or deed of trust, and shall record such payment bond in the office of the county recorder in the county where the site is located, then such mortgage or deed of trust shall be preferred to all liens for labor, services, equipment, or materials furnished after such recording. 3139 Payment Bond to Secure Priority of Trust Deed over Liens for Site Improvements If the owner of the land or holder of any mortgage or deed of trust, which is subordinate pursuant to Section 3137 to any lien, shall procure a payment bond in an amount not less than 50 percent of the principal amount of such mortgage or deed of trust and shall record such payment bond in the office of the county recorder in the county where the site is located before completion of the work of improvement, then such mortgage or deed of trust shall be preferred to all such liens provided in Section 3112. 3140 Amount of Lien After Deducting Credits and Offsets Any original contractor or subcontractor shall be entitled to recover, upon a claim of lien recorded by him, only such amount as may be due him according to the terms of his contract after deducting all claims of other claimants for labor, services, equipment, or materials furnished and embraced within his contract. ARTICLE 7 ENFORCEMENT OF LIEN 3143 Release Bond If the owner of property, or the owner of any interest therein, sought to be charged with a claim of lien, or any original contractor or subcontractor disputes the correctness or validity of any claim of lien, he may record in the office of the county recorder in which such claim of lien was recorded, either before or after the commencement of an action to enforce such claim of lien, a bond executed by a corporation authorized to issue surety bonds in the State of California, in a penal sum equal to 11/2 times the amount of the claim or 11/2 times the amount allocated in the claim of lien to the parcel or parcels of real property sought to be released, which bond shall be conditioned for the payment of any sum which the claimant may recover on the claim together with his cost of suit in the action, if he recovers therein. Upon the recording of such bond the real property described in such bond is released from the lien and from any action brought to foreclose such lien. The principal upon such bond may be either the owner of the property or the owner of any interest therein, or any original contractor, subcontractor, or sub-subcontractor affected by such claim of lien. 3144 Time for Filing Foreclosure Suit (a) No lien provided for in this chapter binds any property for a longer period of time than 90 days after the recording of the claim of lien, unless within that time an action to foreclose the lien is commenced in a proper court, except that, if credit is given and notice of the fact and terms of such credit is recorded in the office of the county recorder subsequent to the recording of such claim of lien and prior to the expiration of such 90-day period, then such lien continues in force until 90 days after the expiration of such credit, but in no case longer than one year from the time of completion of the work of improvement. (b) If the claimant fails to commence an action to foreclose the lien within the time limitation provided in this section, the lien automatically shall be null and void and of no further force and effect. 3144.5 Notice of Recording Release Bond; Statute of Limitations on Bond Any person who obtains a lien release bond which is recorded pursuant to Section 3143 shall give notice of the recording to the lienholder by mailing a copy of the bond to the lienholder at the address appearing on the lien. Service of the notice shall be by certified or registered mail, return receipt requested. Failure to give the notice provided by this section shall not affect the validity of the lien release bond, but the statute of limitations on any action on the bond shall be tolled until the notice is given. Any action on the lien release bond shall be commenced by the claimant within six months of the recording of the lien release bond. 3145 Notice of Agreement of Credit or Extension of the Lien; Recording As against any purchaser or encumbrancer for value and in good faith whose rights are acquired subsequent to the expiration of the 90-day period following the recording of the claim of lien, no giving of credit or extension of the lien or of the time to enforce the same shall be effective unless evidenced by a notice or agreement recorded in the office of the county recorder prior to the acquisition of the rights of such purchaser or encumbrancer. 3146 Notice of Pendency of Action After the filing of the complaint in the proper court, the plaintiff may record in the office of the county recorder of the county, or of the several counties in which the property is situated, a notice of the pendency of such proceedings, as provided in Section 409 of the Code of Civil Procedure. Only from the time of recording such notice shall a purchaser or encumbrancer of the property affected thereby be deemed to have constructive notice of the pendency of the action, and in that event only if its pendency against parties designated by their real names. 3147 Discretionary Two-Year Dismissal If the action to foreclose the lien is not brought to trial within two years after the commencement thereof, the court may in its discretion dismiss the same for want of prosecution. 3148 Effect of Dismissal or Judgment In all cases the dismissal of an action to foreclose the lien (unless it is expressly stated that the same is without prejudice) or a judgment rendered therein that no lien exists shall be equivalent to the cancellation and removal from the record of such lien. 3149 Joinder and Consolidation of Foreclosure Actions Any number of persons claiming liens on the same property may join in the same action to foreclose their liens and when separate actions are commenced the court may consolidate them. 3150 Recording Costs In addition to any other costs allowed by law, the court in an action to foreclose a lien must also allow as costs the money paid for verifying and recording the lien, such costs to be allowed each claimant whose lien is established, whether he be plaintiff or defendant. 3151 Deficiency Judgment Whenever on the sale of the property subject to any liens provided for in this chapter, under a judgment of foreclosure of such lien, there is a deficiency of proceeds, judgment for the deficiency may be entered against any party personally liable therefor in like manner and with like effect as in an action for the foreclosure of a mortgage. 3152 Lien does not Affect the Right to Maintain a Personal Action or Issuance of a Writ of Attachment Nothing contained in this title affects the right of a claimant to maintain a personal action to recover a debt against the person liable therefor either in a separate action or in the action to foreclose the lien, nor any right the claimant may have to the issuance of a writ of attachment or execution or to enforce a judgment by other means. In an application for a writ of attachment, the claimant shall refer to this section. A lien held by the claimant under this chapter does not affect the right to procure a writ of attachment. The judgment, if any, obtained by the claimant in a personal action, or personal judgment obtained in a mechanic’s lien action, does not impair or merge a lien held by the claimant under this chapter, but any money collected on the judgment shall be credited on the amount of the lien. 3153 Contractor Shall Defend Owner Against Mechanics Lien Actions; Liability of Performance Bond Surety In all cases where a claim of lien is recorded for labor, services, equipment, or materials furnished to any contractor, he shall defend any action brought thereon at his own expense, and during the pendency of such action the owner may withhold from the original contractor the amount of money for which the claim of lien is recorded. In case of judgment in such action against the owner or his property upon the lien, the owner shall be entitled to deduct from any amount then or thereafter due from him to the original contractor the amount of such judgment and costs. If the amount of such judgment and costs exceeds the amount due from him to the original contractor, or if he has settled with the original contractor in full, he shall be entitled to recover back from the original contractor, or the sureties on any bond given by him for the faithful performance of his contract, any amount of such judgment and costs in excess of the contract price, and for which the original contractor was originally the party liable. 3154 Owner’s Petition for Decree to Release Property from Lien (a) At any time after the expiration of the time period specified by Section 3144 with regard to the period during which property is bound by a lien after recordation of a claim of lien, where no action has been brought to enforce such lien, the owner of the property or the owner of any interest therein may petition the proper court for a decree to release the property from the lien. (1) on the preliminary 20-day notice served by the claimant pursuant to Section 3097, CHAPTER 3 STOP NOTICES FOR PRIVATE WORKS OF IMPROVEMENT ARTICLE 1 APPLICATION OF CHAPTER 3156 Chapter does not Apply to Public Works The provisions of this chapter do not apply to any public work. ARTICLE 2 WHO IS ENTITLED TO SERVE A STOP NOTICE AND BONDED STOP NOTICE 3158 Claimants Other Than Original Contractor; Written Demand for Stop Notice; Forfeiture of Mechanics Lien Right Any of the persons named in Sections 3110, 3111, and 3112, other than the original contractor, may give to the owner a stop notice. Any person who shall fail to serve such a stop notice after a written demand therefor from the owner shall forfeit his right to a mechanic’s lien. 3159 Stop Notice to Construction Lender; Payment Bond; Net Amount of Stop Notice ARTICLE 3 CONDITIONS TO VALID SERVICE OF STOP NOTICE AND BONDED STOP NOTICE 3160 Preliminary Twenty-Day Notice; Time for Service of Stop Notice Service of a stop notice or a bonded stop notice shall be effective only if the claimant: ARTICLE 4 EFFECT OF STOP NOTICE AND BONDED STOP NOTICE 3161 Duty of Owner to Withhold; Payment Bond It shall be the duty of the owner upon receipt of a stop notice pursuant to Section 3158 to withhold from the original contractor or from any person acting under his or her authority and to whom labor or materials, or both, have been furnished, or agreed to be furnished, sufficient money due or to become due to such contractor to answer such claim and any claim of lien that may be recorded therefor, unless a payment bond has been recorded pursuant to the provisions of Section 3235, in which case the owner may, but is not obligated to, withhold such money. If the owner elects not to withhold pursuant to a stop notice by reason of a payment bond having been previously recorded, then the owner shall, within 30 days after receipt of the stop notice, give a written notice to the claimant at the address shown in the stop notice that the bond has been recorded and furnish to the claimant a copy of that bond. 3162 Duty of Construction Lender to Withhold; Payment Bond (a) Upon receipt of a stop notice pursuant to Section 3159, the construction lender may, and upon receipt of a bonded stop notice the construction lender shall, except as provided in this section, withhold from the borrower or other person to whom it or the owner may be obligated to make payments or advancement out of the construction fund, sufficient money to answer the claim and any claim of lien that may be recorded therefor. The construction lender shall be subject to the following: 3163 Objection to Sufficiency of Sureties on Stop Notice Bond If the construction lender objects to the sufficiency of the sureties on the bond accompanying the bonded stop notice, he must give notice in writing of such objection to the claimant within 20 days after the service of the bonded stop notice. The claimant may within 10 days after the receipt of such written objection substitute for the initial bond a bond in like amount executed by a corporate surety licensed to write such bonds in the State of California. If the claimant fails to do so, the construction lender may disregard the bonded stop notice and release all funds withheld in response thereto. ARTICLE 5 PRIORITIES 3166 Stop Notice Takes Priority Over Assignment of Construction Loan Funds No assignment by the owner or contractor of construction loan funds, whether made before or after a stop notice or bonded stop notice is given to a construction lender, shall be held to take priority over the stop notice or bonded stop notice, and such assignment shall have no effect insofar as the rights of claimants who give the stop notice or bonded stop notice are concerned. 3167 Pro Rata Distribution (a) If the money withheld or required to be withheld pursuant to any bonded stop notice shall be insufficient to pay in full the valid claims of all persons by whom such notices were given, the same shall be distributed among such persons in the same ratio that their respective claims bear to the aggregate of all such valid claims. Such pro rata distribution shall be made among the persons entitled to share therein without regard to the order of time in which their respective notices may have been given or their respective actions, if any, commenced. 3168 Willfully False Stop Notice; Forfeiture Any person who willfully gives a false stop notice or bonded stop notice or who willfully includes in his notice labor, services, equipment, or materials not furnished for the property described in such notice forfeits all right to participate in the pro rata distribution of such money and all right to any lien under Chapter 2 (commencing with Section 3109). ARTICLE 6 RELEASE OF STOP NOTICE OR BONDED STOP NOTICE 3171 Release Bond If the owner, construction lender or any original contractor or subcontractor disputes the correctness or validity of any stop notice or bonded stop notice, he may file with the person upon whom such notice was served a bond executed by good and sufficient sureties in a penal sum equal to 11/4 times the amount stated in such notice, conditioned for the payment of any sum not exceeding the penal obligation of the bond which the claimant may recover on the claim, together with his costs of suit in the action, if he recovers therein. Upon the filing of such bond, the funds withheld to respond to the stop notice or bonded stop notice shall forthwith be released. ARTICLE 7 ENFORCEMENT OF RIGHTS ARISING FROM STOP NOTICE AND BONDED STOP NOTICE 3172 Action to Enforce Stop Notice Claim: Commencement; Five-Day Notice of Commencement An action against the owner or construction lender to enforce payment of the claim stated in the stop notice or bonded stop notice may be commenced at any time after 10 days from the date of the service of the stop notice upon either the owner or construction lender and shall be commenced not later than 90 days following the expiration of the period within which claims of lien must be recorded as prescribed in Chapter 2 (commencing with Section 3109). No such action shall be brought to trial or judgment entered until the expiration of said 90-day period. No money shall be withheld by reason of any such notice longer than the expiration of such 90-day period unless such action is commenced. If no such action is commenced, such notice shall cease to be effective and such moneys shall be paid or delivered to the contractor or other person to whom they are due. Notice of commencement of any such action shall be given within five days after commencement thereof to the same persons and in the same manner as provided for service of a stop notice or bonded stop notice. 3173 Discretionary Two-Year Dismissal In case such action is commenced as provided in Section 3172 but is not brought to trial within two years after the commencement thereof, the court may in its discretion dismiss the action for want of prosecution. 3174 Effect of Dismissal or Judgment Upon the dismissal of an action to enforce a stop notice or bonded stop notice, unless expressly stated to be without prejudice, or upon a judgment rendered therein against the claimant, the stop notice or bonded stop notice shall cease to be effective and the moneys withheld shall be paid or delivered to the person to whom they are due. 3175 Joinder and Consolidation; Impleader Any number of persons who have given stop notices or bonded stop notices may join in the same action and when separate actions are commenced the court first acquiring jurisdiction may consolidate them. Upon the motion of the owner or construction lender the court shall require all claimants to the moneys withheld pursuant to stop notices and bonded stop notices to be impleaded in one action, to the end that the respective rights of all parties may be adjudicated therein. 3176 Attorneys Fees to Prevailing Party In any action against an owner or construction lender to enforce payment of a claim stated in a bonded stop notice, the prevailing party shall be entitled to collect from the party held liable by the court for payment of the claim, reasonable attorney’s fees in addition to other costs and in addition to any liability for damages. The court, upon notice and motion by a party, shall determine who is the prevailing party for purposes of this section, whether or not the suit proceeds to final judgment. Except as otherwise provided by this section, the prevailing party shall be the party who recovered a greater relief in the action. The court may also determine that there is no prevailing party. Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section. Where the defendant alleges in his or her answer that he or she tendered to the plaintiff the full amount to which he or she was entitled, and thereupon deposits in court for the plaintiff, the amount so tendered, and the allegation is found to be true, then the defendant is deemed to be a prevailing party. 3176.5 Interest on Stop Notice Claim If the plaintiff is the prevailing party in any action against an owner or construction lender to enforce payment of a claim stated in a bonded stop notice, any amount awarded on the claim shall include interest at the legal rate calculated from the date the bonded stop notice is served upon the owner or construction lender pursuant to Section 3172. |
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