What Happens After I Record My Lien? California Webinar

This blog covers key insights from our recent California construction law webinar, hosted by SunRay Construction Solutions, featuring legal expert William L. Porter, Founder & President of Porter Law Group, Inc. Learn how to navigate critical post-lien deadlines, avoid costly mistakes, and take decisive action to secure payment—whether you're a general contractor, subcontractor, or material supplier.

The 90-Day Mechanics Lien Lawsuit Deadline

Under California law, once you record a mechanics lien, you have 90 days to file a lawsuit to enforce it. If you don’t file within that window, the lien expires. While it may still show up on the property’s title, legally, it becomes useless.

There are exceptions, such as a Notice of Credit, which can extend your deadline up to one year from the date the work was completed. However, this tool should be used cautiously. Often, owners request this extension while they wait on funding, but in many cases, their financial situation worsens—or they file for bankruptcy. If you wait too long, you might lose your chance to recover payment.

Don’t Wait Until the Last Minute

It’s critical not to approach your attorney just days before the 90-day deadline. An attorney needs time to:

• Run a conflicts check

• Prepare documents

• File the lawsuit properly

Reach out two to three weeks in advance. Meanwhile, continue trying to get paid, and if successful, release the lien promptly.

The Danger of Inflating a Mechanics Lien

It may be tempting to pad your lien amount in anticipation of negotiations. For instance, if you're owed $100,000 but file for $125,000 “just in case,” be careful. If the property owner proves your claim is inflated or false, the entire lien can be invalidated—you won’t just be adjusted down, you’ll lose it completely.

Recording a Notice of Pendency of Action

Once your foreclosure lawsuit is filed, within 20 days your attorney must record a Notice of Pendency of Action (Lis Pendens). This notifies potential buyers or lenders that:

• The lien is active

• A lawsuit is underway

Without it, someone could argue the lien was expired, and the court may order its removal. This notice is crucial for protecting your rights while the lawsuit proceeds.

More on the Notice of Credit

If an owner requests a delay and promises future payment, you might consider using a Notice of Credit to extend the lien’s enforceability. SunRay or a similar service can prepare it.

While it legally preserves your lien for up to a year, it's not always effective.

Many contractors find that delays increase risk—especially if the owner’s financial health deteriorates. But if you already filed a lawsuit and the owner later files for bankruptcy, you become a secured creditor, putting you at the front of the line for payment.

Releasing a Mechanics Lien

If you’re paid, you must release the lien by:

1. Signing a Release of Mechanics Lien form

2. Notarizing it

3. Recording it

Failing to release an expired lien, even if no lawsuit was filed, can lead to serious consequences.

Property owners (often via attorney) can demand release. If you refuse, they may go to court, and a judge can:

• Remove the lien

• Impose a judgment against you (typically $4,500–$5,000 for legal costs)

Even worse, a judgment can be reported to the Contractor State License Board (CSLB), potentially leading to license suspension. If you work while suspended, you risk disgorgement—returning all funds received during that project.

Mechanics Lien Priority and "Relation Back"

One unique advantage of California mechanics liens is their relation back feature. Your lien’s priority dates back to the first day anyone performed work on the project—not just you.

So, if a lender recorded a deed of trust after work began but before your lien, you may have priority in a payment hierarchy—even in bankruptcy.

Understanding Stop Payment Notice Deadlines

A stop payment notice can be a powerful tool, especially on public works projects. It tells the owner or lender to stop releasing funds because you're owed money.

Timing Matters

• You can’t file a lawsuit until 10 days after serving the notice.

• The final deadline is 90 days after the period to serve stop notices expires.

That sounds vague, so here’s a better rule:

• If there’s a valid Notice of Completion or Cessation, you have 120 days from that date.

• If there’s no notice, you have 180 days from actual project completion.

To avoid confusion, the best practice is to send a Stop Payment Notice within the 90-day deadline, just like with a mechanics lien. That way, you won’t miss either deadline.

Payment Bond Lawsuit Deadline

A payment bond claim is another option, especially on public works or private projects with bonded general contractors.

After filing your claim, the lawsuit must be filed within:

• Six months of the work of improvement’s completion.

Again, consult your attorney at least two to three weeks before this deadline. Although the statute allows more time than a mechanics lien or stop notice, it’s best to stick to the 90-day rule to stay safe.

Using 90 days as your default deadline keeps things simple and safe. Also, always release your liens or notices once paid, and speak to your attorney well ahead of any deadline.

Want to Learn More?

There are several useful articles on our website covering mechanics liens, stop notices, and payment bonds in California in more detail.  

Commonly Asked Questions on Recording a California Mechanics Lien

1. Can I amend my mechanics lien to adjust the amount if I’m still within the deadline?

You cannot increase the lien amount once it’s been recorded. However, you can reduce the amount by filing a Partial Release of Mechanics Lien, which must be notarized and recorded.

If you’re still within the valid lien recording period, you can also release the original lien and file a new one—even on the same day—with the correct or updated amount. The new lien will replace the old one. Additionally, if your work covers multiple lots or parcels, you may release individual lots as payments are made, using a partial release.

2. Can a property owner prevent me from recording a lien if I was hired by a tenant?

In theory, a property owner can attempt to limit lien rights by recording or posting a Notice of Non-Responsibility. This is often done when an owner claims they had no knowledge or involvement in a tenant’s construction project.

However, if the lease agreement clearly shows the owner knew or approved the improvements, the notice is often ineffective. Courts typically look at the facts—such as lease terms, emails, or prior correspondence—to determine if the owner’s claim is valid.

So, yes, you can still record a lien in most cases. The notice might be challenged and invalidated during litigation.

3. Can I lien a tenant’s leasehold interest in California?

Yes, you can place a lien on a tenant’s leasehold interest, which is treated like a temporary ownership right. While foreclosing on a leasehold interest is rare, it can disrupt business operations and pressure the responsible party to pay.

It’s a legal strategy that can lead to resolution before a foreclosure is ever finalized.

4. What happens to the Notice of Pendency of Action (Lis Pendens)? Is it recorded, served, or both?

The Notice of Pendency of Action (Lis Pendens) is both:

• Recorded with the county recorder, and

• Served to all relevant parties in the lawsuit, including the property owner, general contractor, banks, and any other defendants.

• Proper service and proof of service are handled by attorneys and are critical to keeping the lien valid through litigation.

5. If a private commercial project has a bond, can I file both a lien and a bond claim?

Yes. In California, you can file:

• A mechanics lien

• A payment bond claim

• A stop payment notice

You can also file a breach of contract claim and other remedies (e.g., prompt payment penalties) in the same lawsuit. Filing all available claims strengthens your legal position. If one claim fails (e.g., a late lien), others may still succeed.

In most cases, someone—whether the bond company, contractor, or property owner—will pay before it goes to trial. But if the debtor goes bankrupt, your stop payment notice, or bond claim may still secure payment.