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Filing a lien within my right s

We were the subs on a job and they filed a notice of completion on the project feb 14 . the city issued them two permits one for on site and one for offsite work . The contractor is withholding retention from us for some of the offsite work that we clearly have written in our warranty and subcontract exclusion of that scope of work . Since there are two permits how do I find out if that notice of completion was for the entire project or would it only pertain to the permit that has been officially signed off by the inspector . the one permit that has not been signed off is the offsite work which is the scope of work that the contractor is withholding the retention . Trying to see if I am within my legal rights to file a mechanics lien on the project . Any help would be appreciated

1 reply

May 22, 2018

That's a good question. Under § 8190 of the California Civil Code, an owner that files a Notice of Completion must, within 10 days of filing, provide a copy to any claimant who has sent the owner preliminary notice. Of course, a Notice of Completion can be filed only for a portion of the work - specifically, under § 8186, if the work of improvement has 2 or more direct contracts, a Notice of Completion may be filed for each direct contract. Luckily, under § 8182(c)(1), if the notice of commencement is only given for some portion of the work, the Notice of Completion must say so. That section prescribes that the given Notice of Completion must include "the name of the direct contractor under that contract and a general statement of the work provided pursuant to the contract." So, to wrap this all together, if a claimant has sent preliminary notice, the claimant must receive a copy of the Notice of Completion filed. While a Notice of Completion may be filed for a portion of a project rather than the entire job, a received Notice of Completion that only covers a portion of the job would have to indicate what portion of that job was complete. So, a claimant will likely be able to read the Notice of Completion sent to them to determine whether the Notice of Completion covers all or a portion of that work. If a claimant has not sent preliminary notice, and is not entitled to receive a Notice of Completion, they will likely not retain the right to file a mechanics lien anyway. If preliminary notice was sent, and if a copy of the Notice of Completion was not sent as required, that Notice of Completion won't be effective to shorten the lien period (and the deadline to file a mechanics lien will be 90 days after the completion of the work of improvement). Finally, it's worth noting that just last week the Supreme Court of California decided a groundbreaking case on retainage practices. Prior to this decision, many contractors believed they were entitled to withhold excessive retention as long as any good faith dispute existed between the contractor and the recipient of payment. Following last week's case, the Supreme Court of California determined that any retention amounts withheld under California's "good faith" exception must actually be tied directly to the good faith dispute. More on that here: California Retainage Laws Make More Sense After Supreme Court Ruling.

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