July 1, 2012 brings changes to the old laws relating to Preliminary Notices, Stop Notices, Payment Bonds and Mechanics’ Liens. These changes relate to the future only and do not require claimants to re-serve or re-record notices done before June 30th.
The new statutes, now found beginning with Civil Code section 8000, do not completely re-write the old laws and do not substantially change the time periods, contents of notices or remedies available. What the new statutes do is change and add new definitions of terms and change Stop Notice to Stop Payment Notice.
The new statutes define many terms, such as material supplier, claimant, work, construction lender etc. Along these definitions is a change of the term general contractor to direct contractor. A direct contractor is one who contracts directly with a property owner.
The new statutes also define completion of a private project to be actual completion of the project or occupation of the building along with a complete cessation of labor or 60 days of no labor or recording of a Notice of Cessation of Labor after 30 days of no labor.
If a Notice of Completion is recorded, it must be recorded with 15 days of completion, changed from 10 days. (This change applies to both public and private projects.)
Although the contents of many notices remain the same, Civil Code section 8118 limits the addresses for service of notices, while Civil Code section 8110 now allows for service by express mail and overnight delivery by express service carrier.
In addition, Civil Code section 8206 states that only one Preliminary Notice need be given unless the claimant contracts with more than one person/entity. Civil Code section 8200 now requires that anyone contracting directly with a property owner must serve a Preliminary Notice to the construction lender, if any.
Although many statutes limit, while others expand, one set of statutes changes the name of the remedy formerly known as a Stop Notice. Stop Notices for both public and private projects, for construction lenders and property owners are now called Stop Payment Notices. The concept is still the same, but the name has changed.
Unlike the old laws, the laws found in Chapter 2, (beginning with Civil Code Section 8100), named “Notice” contain laws that relate to all notices, Preliminary Notices, Stop Payment Notices, Mechanics’ Liens and Payment Bonds. The claimant must comply with these “general” statutes and then refer to the individual notice/remedies statues for further requirements.
The foregoing is general advice and should not be substituted for a careful review of all of the facts and laws relating to your claim. To determine and take advantage of all available remedies, and comply with applicable you should discuss your specific situation with me or another experienced construction attorney.
Robert A. Weissman can be reached at (805) 371-0500 ext. 1 or raw4law@verizon.net
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