Payment & collections
A subcontractor who is not paid has no contract with the owner to sue on. That is why California’s statutory payment remedies exist, and why they matter more at the subcontractor tier than anywhere else on a project. It is also why the deadlines deserve attention: several of them run shorter for a subcontractor than for the direct contractor on the same job, and one of them can close without the subcontractor being told it opened. This guide, reviewed by Jayson R. Elliott, works through the remedies in the order a subcontractor should actually consider them.
Everything else on this page depends on this step. Civil Code section 8200 requires preliminary notice before recording a lien claim, giving a stop payment notice, or asserting a claim against a payment bond, and makes compliance a necessary prerequisite to the validity of a lien claim or stop payment notice. Section 8204 sets the deadline: not later than 20 days after the claimant first furnishes work on the work of improvement.
For a subcontractor, none of the exemptions apply. The laborer carve-out does not cover a subcontracting business, and the provision that lets a claimant in direct contract with the owner serve only the construction lender is by definition unavailable to someone whose contract is with the general contractor. A subcontractor serves all three: the owner, the direct contractor, and the construction lender if there is one.
Section 8200 requires notice to the direct contractor to which the claimant provides work, either directly or through one or more subcontractors. A sub-subcontractor or a supplier two tiers down still notifies the direct contractor. Serving only the subcontractor who issued the purchase order does not satisfy the statute.
This objection has a statutory answer that is badly underused. Civil Code section 8208 requires a direct contractor to make available, to any person seeking to give preliminary notice, the name and address of the owner and the name and address of the construction lender if there is one. A subcontractor is entitled to ask and the direct contractor is obligated to provide it. Section 8210 addresses the related problem of financing obtained after work commenced.
Three of them, and they compound.
The statute is not blind to the problem, and both answers are underused.
Civil Code section 8214 permits a claimant who has served a preliminary notice to file that notice with the county recorder, and the section addresses notification when a notice of completion or cessation is recorded. That is the mechanism aimed squarely at the 30-day blind spot above. It costs very little relative to what it protects, and it belongs in job-start procedure rather than in a crisis response.
Civil Code section 8212 provides that an owner’s agreement to waive rights under the preliminary notice chapter, or to forgo its requirements, is void and unenforceable. Contract language purporting to strip these protections should be read against that section rather than accepted.
A lien attaches to the improved property and clouds title. Under Civil Code section 8414, a claimant other than a direct contractor may record after ceasing to provide work, subject to the deadlines above. Recording starts a second clock: Civil Code section 8460 requires an action to enforce the lien within 90 days after recording, failing which the lien expires and becomes unenforceable. Going back to perform further contract work after recording can invalidate the lien, which is a genuine risk when a general contractor asks a subcontractor to return and finish.
A stop payment notice reaches construction funds rather than property, directing the owner or construction lender to withhold. It is often the faster source of leverage, because it does not require foreclosure. Civil Code section 8508 conditions validity on preliminary notice and on timing that tracks the lien recording deadline, and section 8550 sets the enforcement window — no earlier than 10 days after giving the notice, and not later than 90 days after expiration of the period in which the notice must be given.
Section 8550 also contains the consequence that distinguishes this remedy from a lien: if no action is commenced in time, the notice ceases to be effective and the person withholding the funds shall release them. An unenforced stop payment notice does not merely lapse — the money leaves.
Where a payment bond exists, it reaches a surety rather than the owner or the property, and it carries something the other two remedies lack. Under Civil Code section 8612(b), a claimant who did not give preliminary notice may still enforce a bond claim by giving written notice to the surety and the bond principal within 15 days after recordation of a notice of completion, or within 75 days after completion if none was recorded.
That is the single most important thing for a subcontractor who realises late that preliminary notice was missed: the lien and the stop payment notice are gone, and the bond claim may not be. Establish whether a bond exists before concluding there is no remedy. Note also that section 8612(c) and (d) condition this route for claimants without a direct contractual relationship with the contractor, and practitioners have described that language as ambiguous — which is a reason for lower-tier claimants to serve preliminary notice rather than plan around the fallback.
On public work a mechanics lien is generally unavailable, so the payment bond and the stop payment notice carry the load. Civil Code section 9550 requires a direct contractor awarded a public works contract in excess of twenty-five thousand dollars to give a payment bond before commencement, and section 9554 requires it to be not less than one hundred percent of the total amount payable. Section 9558 sets the deadline to sue: any time after the claimant ceases to provide work, but not later than six months after the period in which a stop payment notice may be given under section 9356.
One point cuts the other way on public work. Labor Code section 1775 obliges the general contractor to monitor a subcontractor’s prevailing wage payment through periodic review of certified payroll — so a subcontractor’s own compliance is visible upstream, and a subcontractor pursuing payment while carrying prevailing wage problems is pursuing it in full view of the party best positioned to raise them.
Every remedy on this page is a route to a judgment, and Business and Professions Code section 7031 bars any person acting in the capacity of a contractor from bringing or maintaining an action to collect compensation for work requiring a license without alleging licensure at all times during performance — regardless of the merits. Section 7031 also lets the party who paid recover all compensation already paid to an unlicensed contractor.
Before serving a notice or recording anything, a subcontractor should confirm its own licensure and proper classification for the work performed. A payment dispute is the moment that question gets asked.
Before you ask
California provides three statutory remedies under Civil Code sections 8000 through 9566: a mechanics lien against the improved property, a stop payment notice reaching undisbursed construction funds, and a claim against a payment bond. All three depend on preliminary notice under section 8200, which is why that step matters more at the subcontractor tier than anywhere else on a project.
Yes, where a notice of completion or cessation has been recorded — as a ceiling rather than an extension. Civil Code section 8412 requires a direct contractor to record before the earlier of 90 days after completion or 60 days after that recording, and section 8414 applies the same structure to other claimants — subcontractors and suppliers — with 30 days. Absent a recorded notice, both have 90 days after completion.
Not for mechanics lien deadline purposes. The shorter 30-day window under Civil Code section 8414 attaches to the statutory role rather than to who signed the contract, so a supplier in direct contract with the owner still takes the shorter period when a notice of completion is recorded.
Civil Code section 8214 permits a claimant who has served a preliminary notice to file that notice with the county recorder, and the section addresses notification when a notice of completion or cessation is recorded. Because a recorded notice can cut a subcontractor to 30 days from that notice under section 8414, this filing step is aimed directly at the blind spot.
Possibly, but only against a bond. Civil Code section 8612(b) allows a claimant who did not give preliminary notice to enforce a payment bond claim by giving written notice to the surety and the bond principal within 15 days after recordation of a notice of completion, or 75 days after completion if none was recorded. No comparable route exists for a mechanics lien or a stop payment notice.
Civil Code section 8212 provides that an owner’s agreement to waive rights under the preliminary notice chapter, or to forgo its requirements, is void and unenforceable. Contract language purporting to strip those protections should be read against the statute rather than accepted at face value.
Keep reading
Breadcrumb + pillar parent
Preliminary notice section
Mechanics lien remedy
Stop payment notice remedy
Payment bond remedy and §8612
Public works section
Licensure section
Classification reference
Inline first mention: subcontractor, supplier, tier, direct contractor, notice of completion, surety
Attorneys section — end of article
If this describes your situation, an attorney affiliated with Bay Legal PC, CA Bar No. 332479, can review it with you.