Today's Law As Amended


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SB-237 Contractors: mechanics’ liens.(2007-2008)



As Amends the Law Today


SECTION 1.

 Article 10.5 (commencing with Section 7170) is added to Chapter 9 of Division 3 of the Business and Professions Code, to read:

Article  10.5. Mechanics’ Liens
7170.
 For purposes of this article, the following definitions apply:
(a) “Claim of lien” is defined as provided in Section 3084 of the Civil Code.
(b) “Original contractor” is defined as provided in Section 3095 of the Civil Code.
(c) “Preliminary 20-day notice (private work)” is defined as provided in Section 3097 of the Civil Code.
(d) “Subcontractor” is defined as provided in Section 3104 of the Civil Code.
7171.
 (a) A subcontractor licensed pursuant to this chapter shall, prior to recording a claim of lien, provide a preliminary 20-day notice (private work) in accordance with the provisions of Section 3097 of the Civil Code. That notice shall contain, at a minimum, all of the following information:
(1) A general description of the labor, service, equipment, or materials furnished, or to be furnished, and an estimate of the total price thereof.
(2) The name and address of the person furnishing that labor, service, equipment, or materials.
(3) The name of the person who contracted for purchase of that labor, service, equipment, or materials.
(4) A description of the jobsite sufficient for identification.
(5) The following statement in boldface type:


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. Other than residential homeowners of dwellings containing fewer than five units, private project owners must notify the original contractor and any lien claimant who has provided the owner with a preliminary 20-day lien notice in accordance with Section 3097 of the Civil Code that a notice of completion or notice of cessation has been recorded within 10 days of its recordation. Notice shall be by registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing. Failure to notify will extend the deadlines to record a lien.


(b) A subcontractor licensed under this chapter shall be entitled to enforce a claim of lien only if he or she has given the preliminary 20-day notice (private work) in accordance with the provisions of Section 3097 of the Civil Code, and has made proof of service in accordance with the provisions of Section 3097 of the Civil Code.
(c) A failure to comply with subdivision (a) is a violation of this chapter and is subject to disciplinary action.
(d) A disciplinary action taken pursuant to this section that includes the assessment of a civil penalty shall comply with the following schedule:
(1) A penalty of no more than one thousand dollars ($1,000) shall be imposed for the first violation.
(2) A penalty of two thousand five hundred dollars ($2,500) shall be imposed for the second violation.
(3) A penalty of five thousand dollars ($5,000) shall be imposed for the third and subsequent violations.
7172.
 (a) A licensee who records a claim of lien pursuant to Section 3115, 3116, or 3117 of the Civil Code, and who fails to, within 90 days of recording the claim, either commence an action to foreclose the lien or extend credit and record both notice of the extension and the terms of the credit in the office of the county recorder, shall execute and record a release of the lien within 15 calendar days of the date that the lien becomes null and void under subdivision (b) of Section 3144 of the Civil Code.
(b) A licensee who fails to comply with subdivision (a) is subject to disciplinary action.
(c) Before taking disciplinary action against a licensee under this section, the registrar shall notify the licensee, in writing, that the licensee must execute and record a release of the applicable lien within 15 calendar days from the postmarked date of the notice, and that failure to comply shall result in the assessment of the applicable penalty as provided in subdivision (d). The notice shall be sent by registered and regular mail to the licensee’s address of record on file with the registrar.
(d) A disciplinary action taken pursuant to this section that includes the assessment of a civil penalty shall comply with the following schedule:
(1) A penalty of no more than one thousand dollars ($1,000) shall be imposed for the first violation.
(2) A penalty of two thousand five hundred dollars ($2,500) shall be imposed for the second violation.
(3) A penalty of five thousand dollars ($5,000) shall be imposed for the third and subsequent violations.
7173.
 The failure of a licensee to pay attorneys’ fees awarded by a court under Section 3154 of the Civil Code within 90 days of the date of the court’s decree constitutes both of the following:
(a) A willful and deliberate injury to the petitioner if the petitioner has paid in full the attorneys’ fees incurred in order to obtain the decree.
(b) Cause for disciplinary action, in addition to any administrative action authorized by this chapter.