Private vs. Public Projects: Mechanics Liens and Payment Bond Claims in CA

When working on construction projects in California, obtaining timely payment for your labor or materials is crucial. Two primary legal tools available to secure payment are mechanics liens and payment bond claims. Understanding the distinctions between these options can help you choose the most appropriate remedy for your situation.

What Is a Mechanics Lien?

A mechanics lien is a legal claim against a property for unpaid work or materials, usually on private projects in California. To file, subcontractors and suppliers must serve a Preliminary 20-Day Notice to the property owner and general contractor. After that, the lien is filed with the county recorder. If payment is not received, a lawsuit may be required to enforce the lien.

What Is a Payment Bond Claim?

A payment bond claim is a legal claim against a surety bond on public projects, required in California for projects over $25,000. To file, you must have supplied labor, materials, or equipment and not been paid in full. A Preliminary 20-Day Notice is usually required, and the claim is submitted to the surety company. If payment is not made, legal action may be necessary to enforce the claim.

5 Key Differences Between Mechanics Liens and Payment Bond Claims

1. Applicable Projects

Mechanics liens are primarily used on private construction projects. They allow subcontractors, suppliers, and laborers to place a legal claim directly on the property where work was performed or materials were supplied.

Payment bond claims, on the other hand, are most commonly used on public projects where a payment bond is required by law. Some private projects may also require bonds, but payment bond claims target the surety bond rather than the property itself.

2. Target of the Claim

A mechanics lien places a legal claim against the property to secure payment. If payment is not received, the lien can be enforced through a foreclosure process on the property itself.

In contrast, a payment bond claim targets the surety bond issued by the general contractor. Instead of placing a claim on property, the claim is made against the bond to guarantee that unpaid subcontractors and suppliers receive compensation.

3. Notice Requirements

Both mechanics liens and payment bond claims in California typically require a Preliminary 20-Day Notice, but the purpose and impact differ.

For mechanics liens, serving this notice is essential to preserve lien rights on private projects. Failing to provide it may limit your lien to only the work or materials supplied within the last 20 days. On the other hand, for payment bond claims, the notice preserves your right to file a claim against the surety bond. While the notice does not target property, it secures your claim against the bond as legally enforceable.

4. Filing Deadlines

Mechanics liens generally must be filed within 90 days after completion of the work, although exact deadlines can vary depending on the type of project and contractual terms.

Payment bond claims usually have a different deadline, often requiring the claim to be submitted within six months after the project is completed, though this can depend on the bond terms and project specifics.

5. Enforcement Process

If payment is not received, a mechanics lien requires initiating a lawsuit to foreclose on the property. The lien essentially provides a legal pathway to collect payment directly from the property itself.

For a payment bond claim, if the surety does not pay after the claim is submitted, the claimant may need to file a lawsuit to enforce the bond. This legal action targets the bond rather than the property and protects your right to receive compensation through the surety company.

When to Use a Mechanics Lien vs. a Payment Bond Claim

• Mechanics Lien: Consider filing a mechanics lien if you are working on a private project and have not been paid for your work or materials. This option allows you to place a claim directly against the property.

• Payment Bond Claim: Go for a payment bond claim if you are working on a public project that requires a payment bond. This claim targets the surety bond and provides a separate avenue for recovery.

In some cases, both remedies may be available, depending on the specifics of the project and your contractual relationships.

Take Action Today with Mechanics Lien Services or a Payment Bond Claim in California

Understanding the differences between mechanics liens and payment bond claims is important for protecting your rights and receiving timely payment for your work. By choosing the appropriate remedy and following the necessary procedures, you can strengthen your chances of successful recovery.

For assistance with preparing and filing the required documents, consider contacting Easy Law Inc. for expert mechanics lien services in California or to submit a payment bond claim in California.

Easy Law Construction Notices is not a law firm, and nothing in this article should be construed as legal advice. If you are seeking legal advice regarding construction matters, you can contact The Green Law Group, LLP, for a free initial consultation.