Mechanics Liens and Window Replacement: How to Avoid Paying Twice

Most homeowners first hear the words "mechanics lien" when one is recorded against them. On a window job the risk is easy to describe and easy to control, as long as you set it up before the first payment and not after the last one.

This page is part of our California window guide. It is general information, not legal advice. If a lien has been recorded against your property, talk to an attorney promptly, because the deadlines are short.

What a mechanics lien is

A mechanics lien is a claim recorded against real property by someone who provided labor or materials to improve it and was not paid. California's rules are in the Civil Code starting at section 8000.

The feature that surprises people is who can file. It is not only the contractor you signed with. A subcontractor who installed the windows and a supplier who delivered them have lien rights of their own, even though you have no contract with either. The Contractors State License Board puts it plainly: contractors, subcontractors, laborers and material suppliers can file a mechanics lien on your property if they are not paid.

A recorded lien clouds your title. It can get in the way of selling, refinancing or opening a line of credit until it is released. The claimant can also sue to enforce it, and the remedy in that lawsuit is a court-ordered sale of the property.

How it happens on a window job

Here is the usual case in plain terms. It is an illustration, not a story about a real job.

You hire a contractor to replace the windows in your house. The contractor orders them from a window distributor on credit. The windows are delivered and installed, the job looks good, and you pay the contractor the full contract price.

The contractor, short on cash, uses your money to pay an older debt and never pays the distributor for your windows. The distributor is owed money for materials that are now part of your house. If it sent you a preliminary notice on time, it can record a lien against your property for the unpaid amount.

You have now paid once, and you are facing a demand to pay again. Your claim against the contractor is real, but it is a claim against a business that has already shown it cannot pay its bills. This is why the law has you protect each payment as you make it.

The preliminary notice

A supplier or subcontractor cannot lien your home out of nowhere. Under Civil Code section 8200, before recording a lien, a claimant must give a preliminary notice to the owner, to the direct contractor, and to the construction lender if there is one. Compliance is a necessary prerequisite to a valid lien.

Under section 8204, the notice is due no later than 20 days after the claimant first furnished work. A late notice is not worthless, but it only preserves lien rights for work furnished within the 20 days before the notice was given and afterward.

Two groups do not have to send you one. A claimant with a direct contract with the owner, which means your own contractor, only has to notify a construction lender. And laborers are not required to give preliminary notice at all.

What this means for you:

• A preliminary notice is not bad news. It tells you who is supplying your job and who has lien rights. Careful suppliers send one on every project.
• Keep every notice and write down the date it arrived. CSLB recommends this. The stack of notices is your list of people to collect releases from.
• No notice usually means no lien right for a supplier or subcontractor. It does not mean nobody is owed money.

Ask your contractor at signing who is supplying the windows and whether any part of the installation is subcontracted. Your contract is required to say whether a subcontractor will be used. See what a California window contract must include.

Lien releases: the four statutory forms

A waiver and release is a signed statement from a potential claimant giving up lien rights for a specific payment. California fixes the wording by statute. CSLB notes that a release must follow, substantially, one of the forms set out in Civil Code sections 8132, 8134, 8136 and 8138.

The conditional forms carry a printed warning that a person should not rely on the document unless satisfied that the claimant has received payment. The unconditional forms carry a notice to the claimant that the document gives up lien rights unconditionally. The wording is deliberate: a conditional release is a promise that depends on money arriving, and an unconditional one is a receipt.

Who has to sign

The person giving up the right. A release from your contractor covers your contractor. It does not cover the window distributor. CSLB stresses that the actual claimant signs the unconditional release.

Civil Code section 8122 is the reason. An owner or a direct contractor may not, by contract or otherwise, waive or impair another claimant's lien rights. A line in your contract saying "no liens will be filed" does not bind the supplier. Only the supplier's own signature on a statutory form does.

How to pay so you are protected

For a typical window job with a down payment, a payment on delivery and a final payment, the routine looks like this.

1. At signing, ask who supplies the windows and whether an installer is subcontracted. Write the names down.
2. As notices arrive, keep them and add any new names to your list.
3. Before each progress payment, ask for a conditional release on progress payment from the contractor and from each supplier or subcontractor on your list. CSLB notes the direct contractor is responsible for obtaining those signatures.
4. After each payment clears, ask for the unconditional releases for that payment.
5. Hold the next payment until you have them. Business and Professions Code section 7159.5(a)(6) says that after any payment and before any further payment, the contractor must furnish on request a full and unconditional release for the portion of work paid for, and that you may withhold further payments until it is furnished.
6. At the end, exchange the final payment for conditional final releases, and collect unconditional final releases once the payment clears.

Joint checks

CSLB calls joint checks the simplest way to prevent liens. You make the check payable to both the contractor and the supplier. Both have to endorse it, so the supplier knows the money exists and gets its share before the check can be cashed. On a window job, where one supplier often accounts for a large share of the cost, a joint check for the delivery payment covers the main risk in one step.

Do not pay ahead of the work

The other half of the protection is keeping payments behind the work. California limits the down payment and bars a contractor from collecting more than the value of work performed or material delivered. If you never pay for windows that have not arrived, the amount anyone could lien for stays small.

The deadlines that apply to a claimant

Lien rights expire quickly, and the dates are worth knowing if a claim arrives.

• Recording, for your direct contractor: under section 8412, after completing the contract and before the earlier of 90 days after completion of the work, or 60 days after you record a notice of completion.
• Recording, for a subcontractor or supplier: under section 8414, before the earlier of 90 days after completion of the work, or 30 days after you record a notice of completion.
• Service on you: under section 8416, the claim must include a statutory "Notice of Mechanics Lien" and be served on the owner by mail. A lien that is not served as required is unenforceable.
• Enforcement: under section 8460, the claimant must file a court action within 90 days after recording the lien. If it does not, the lien expires and is unenforceable, unless an extension of credit has been recorded.

CSLB points out that an owner can shorten the recording period by filing a notice of completion with the county recorder within 15 days of the work being finished. On a larger project that is worth asking a title company or attorney about.

If a lien is recorded against you

CSLB's guidance is to check validity first. Was a preliminary notice served on time? Did the Notice of Mechanics Lien come with the claim? Was it recorded within the deadline? Has an enforcement action been filed within 90 days?

An invalid or expired lien does not remove itself. It stays in the county records until someone clears it. Under section 8482, before asking a court to release an expired lien you must give the claimant at least 10 days' notice demanding that it record a release. If the claimant does not, section 8480 lets you petition the court for an order releasing the property.

If the lien is valid and the claimant was not paid, the practical answer is usually to get the supplier paid and get an unconditional final release in exchange, and then pursue the contractor. CSLB accepts complaints against licensees. It investigates violations and can discipline the license, but it does not guarantee you get money back.

What to ask a window contractor

• Who supplies your windows, and do you buy from them on account?
• Do your own employees install, or do you subcontract the installation?
• Will you provide conditional and unconditional releases from yourself and the supplier with each payment?
• Are you willing to accept a joint check for the delivery payment?

A contractor who pays suppliers on time has no reason to resist any of this. Hesitation here belongs on the same list as the items in our guides to window sales red flags and red flags in contractor bids. For the license and bond side, see licensing and insurance requirements for California contractors, and for how payment structure shows up in a quote, see how to compare window replacement quotes.

Sources

• CSLB: mechanics liens for consumers, including how to prevent a lien, what to do if one is filed, and the waiver and release forms
• Civil Code section 8200 and section 8204 (preliminary notice)
• Civil Code section 8122 (lien rights cannot be waived by someone else's contract)
• Civil Code sections 8132, 8134, 8136 and 8138 (statutory waiver and release forms)
• Civil Code sections 8412, 8414, 8416 and 8460 (recording, service and enforcement deadlines)
• Civil Code sections 8480 and 8482 (petition to release a lien)
• Business and Professions Code section 7159.5 (releases between payments)

Working with Heritage Exteriors

Ask us who supplies your windows and how lien releases will be handled before you sign; they are ordinary questions and we are glad to answer them. If you want to talk through a payment schedule that keeps your payments matched to releases, raise it when we quote. Licensed in California, CSLB #1055919. Call (916) 546-2991.