A contractors' lien functions in the same manner as a mechanic's lien and is defined under "Mechanics' Lien Law (Civil Code 3109 et seq.). Article XIV, section 3 states that "Mechanics, persons furnishing materials, artisans, and laborers of every class, shall have a lien upon the property which they have bestowed labor or furnished material for the value of such labor done and material furnished...."
The law ensures that those who provide construction-related work and services for the improvement of the real property of others are paid for the work and services in the event the property owner fails to pay the contractor, or the contractor fails to pay the subcontractors or material men. This is accomplished by imposing a lien on the improved property, thus making the improved property security for payment.
Mechanics' liens must be enforced through judicial action. As a prerequisite to filing a court action to foreclose upon the lien and sell the property, the claimant must record a claim of lien in the county in which the real property subject to the lien is located.
The preliminary 20-day notice must be given no later than 20 days after the labor, services, equipment or materials were first furnished to the job site. Architects, engineers, and surveyors must give notice within 20 days after the work of improvement has commenced.
The law provides that anyone who furnishes labor or materials to a consumer can record a "Claim of Lien" or "Mechanic's Lien" against a consumer's home if they are not paid. Even if a consumer has paid the general contractor in accordance with the contract, if that contractor fails to pay any subcontractor or materials supplier who performed work or supplied materials in connection with that project, a consumer still runs the risk of having a Mechanic's Lien filed against his/her home and may risk foreclosure. A consumer could be required to pay a bill twice to keep from losing his/her home.
Department of Consumer Affairs
Contractors State License Board
9821 Business Park Drive
Sacramento, CA 95827
(800) 321-2752 (forms, applications, information)
Department of Motor Vehicles
Lien Sale Section, Reg. 46
PO Box 932317
Sacramento, CA 94232-3170
Publications available: A Consumer's Guide to Filing Construction Complaints and What You Should Know Before You Hire A Contractor, Contracts Fact Sheet