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What should a California subcontractor do differently if anything under shelter in place?

CaliforniaCoronavirusMechanics LienPreliminary Notice

1. Do pre-liens "expire" if the subcontractor doesn't work on the job for 30, 60 or 90 days due to shelter in place orders / job site closures? 2. Other suggestions for subcontractors during this extraordinary period?

6 replies

Apr 9, 2020
Generally, subcontractors won't need to send any additional notice when the job site is closed due to the coronavirus shutdown. Sending some sort of notice to re-acquaint your company when you resume work might be useful - but it's not necessary in order to preserve mechanics lien rights when work will continue on the job. With that being said, if your project can't continue due to coronavirus, it might be smart to be proactive and provide formal written notice that your work has been delayed due to the shutdown: COVID-19 Notice of Project Impacts & Delays. Finally, while notice might not be a big issue going forward, California's definition of "completion" should raise some eyebrows. This is especially true considering California's lien deadlines run from the completion date.

"Completion" and work stoppages in California

According to California Civil Code § 8180(3), "completion" occurs when there is a "Cessation of labor for a continuous period of 60 days." However, this would require that no work was done on the project for the 60 day period. Plus, considering the current state of the world, it wouldn't make much sense to consider all delayed projects "complete." What's more, if work picked back up after the 60 day period, obviously the job isn't complete. Still, to be the best prepared, it might be useful to request a formal notice of delay due to the coronavirus outbreak and confirmation that the stoppage of work should not be construed as a "completion" of the project under § 8180(3). In the event that a 60+ day total stoppage of work occurs, it is possible (though seemingly unlikely)that "completion" has occurred as a matter of law. So, it'd be wise to check in to see whether any work is being done on the site, plus it'd be smart to request some formal notice of the delay.

How subcontractors can weather coronavirus

The coronavirus outbreak is causing headaches and heartburn for just about every industry - construction included. But, unlike most other industries, construction runs on razor-thin margins and payment problems are common even when the times are good. In response to the upcoming hurdles, Levelset put out this article which I think should be useful: How Contractors Can Survive Coronavirus: Get Paid, Not Burned. As discussed in that piece, it's important to remain vigilant, to send all required notices, and to hyper-aware of your customers' payment behaviors. That way, you can set yourself up to successfully navigate the minefield left after this COVID-19 shutdown.

Additional coronavirus and stimulus resources

Finally, here are some additional resources that I think will be valuable to you. I included some links to stimulus and loan articles because it's generally wise to explore all options - but obviously, some options might not make sense for your particular business. - Coronavirus & Construction Cash Flow - Coronavirus Survival Kit: A Guide to Getting Paid During the COVID-19 Crisis - What’s in the $2 Trillion Coronavirus Stimulus Bill For Construction Businesses & Their Workers? - Small Business Loans For Construction During Coronavirus | Who qualifies & how to apply
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Apr 9, 2020
Matthew - I wasn't logged in when I commented so quick repeat here:
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Apr 9, 2020
1. Thank you for the very helpful response and 2. Did you mean "would" or "wouldn't" in this sentence: Plus, considering the current state of the world, it would make much sense to consider all delayed projects "complete."
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Apr 9, 2020
I meant to say "wouldn't" - sorry about that! I'll see if I can edit my response to make sure that's clear. Thank you for the heads up!
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Apr 5, 2022

The Orders will have a dramatic effect on individuals and employers and will impact, restrict, and/or prohibit many aspects of normal life. So, how does the law determine whether a person is an independent under California law is slightly different than it is for federal tax  . 

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