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It is correct that Public Property cannot be put a lien against in California?

CaliforniaBond ClaimsRight to Lien

We are the winning bid Subcontractor for a public property project in Palo Alto, CA. The GC's subcontract provides: "12. LIENS. Subcontractor shall at all times indemnify and save Contractor and Owner harmless against all liability for claims and liens for labor performed or materials used or furnished to be used on the job, including any costs and expenses for attorney fees, premiums for bonds required by title company or Owner, and all incidental or consequential damages resulting to Contractor or Owner from such claims. Further, in case suit on such claim is brought, Subcontractor shall defend said suit at its own cost and expense, and will pay and satisfy any such lien or judgment as may be established by the decision of the court in said suit. Subcontractor agrees within ten (10) days after written demand, to cause the effect of any suit or lien to be removed from the premises, and in the event Subcontractor shall fail to do so, Contractor is authorized to use whatever means in its discretion it may deem appropriate to cause said lien to be removed or dismissed and the cost thereof, together with actual attorney fees, shall be immediately due and payable to Contractor by Subcontractor. Subcontractor may litigate any lien or suit above described provided it causes the effect thereof to be removed promptly, in advance, from the premises, and shall further do such things as may be necessary to cause Owner not to withhold any monies due to Contractor from Owner by reason of such liens or suits. Notwithstanding anything to the contrary set forth above in this paragraph, Subcontractor shall not be construed to be foregoing its lien rights in the event of a dispute over payments due for services rendered and materials furnished to the Project." Is this typical and fair for a public property project in CA? Do we have any lien rights in CA? Please advise. Thank you!

2 replies

Nov 6, 2018
That's a fair question. First, it's worth mentioning that we're unable to provide you advice on any matter - but we can definitely shed some light and provide some relevant legal information! First, as mentioned above, mechanics liens are not an available tool when working on public projects. There can be some grey area between whether a project is considered "public" or "private" (especially with the rise of P3s projects). But, if the underlying property is owned by a public entity, chances are that a mechanics lien will likely not be available. Of course, this isn't always well-reflected in contracts for public jobs. Often, contractors, project managers, and subs will use their standard contract formats (which will often include language covering liens) regardless of the project type. Thus, there may be some holdover from these contracts that might not specifically apply to the job at hand - and that's pretty common. Regarding whether lien rights are present - as mentioned above, when the project is a public work (and/or when the underlying property is publicly owned), lien rights will very typically not be present. Rather, typically, bond claim and stop payment notice rights are more appropriate to preserve claimants' right to payment on California public jobs. Finally, I'd also like to mention that if you'd like some input from other construction businesses as to whether a given clause is typical or standard, posing a similar question in the zlien Community might be helpful!
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Jan 28, 2020
Thank you for sharing your insight and expertise regarding liens on state-owned property in California. Can you tell me where to find the legal citation regarding Public Property Liens? Is it part of the California Constitution or in one of the various California Codes? Appreciate your help.
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