Subcontractor Lien Rights in California — A Complete Guide

Why Subcontractor Lien Rights Matter

Subcontractors occupy the most vulnerable position in the construction payment chain. You perform the work, but your contract is with the general contractor — not the property owner who ultimately controls the money. When a GC doesn't pay, you have no direct contractual remedy against the owner.

California recognized this problem over a century ago and created a set of powerful statutory protections specifically designed to level the playing field. These lien rights give subcontractors the legal ability to reach past the general contractor and secure payment directly from the property or construction funds.

This guide walks through every tool available to California subcontractors: the preliminary notice, the mechanics lien, the stop payment notice, and the lien waiver rules you need to understand before signing anything.

The Payment Chain Problem

Construction payments flow downhill through a chain of contracts:

• The property owner pays the general contractor
• The general contractor pays the subcontractors
• The subcontractors pay their material suppliers and laborers

The problem is obvious: if the general contractor receives payment from the owner but doesn't pass it down, the subcontractor has no contract with the property owner to enforce. Without lien rights, a subcontractor's only option would be to sue the GC — who may be insolvent, unresponsive, or disputing the amount owed.

California's lien rights bridge this gap. They allow subcontractors to bypass the contractual chain and assert a claim directly against the property itself, the construction lender's funds, or both. This is what makes mechanics lien law so powerful — and so important for every subcontractor to understand.

Step 1: Serve a Preliminary Notice

California Civil Code §8200–§8216

The preliminary notice is the foundation of every subcontractor's lien rights in California. Without it, you cannot file a mechanics lien or serve a stop payment notice. It is the single most important document in construction payment protection.

What it does

A preliminary notice notifies the property owner, general contractor, and construction lender that you are furnishing labor or materials to their project. It does not create a lien — it simply preserves your right to file one later if you don't get paid.

The 20-day rule

Subcontractors must serve a preliminary notice within 20 days of first furnishing labor or materials to the project. If you serve the notice late, your lien rights are limited to work performed within the 20 days before the notice was actually served, plus all work going forward. You lose coverage for any earlier work.

Who must receive it

• The property owner (or reputed owner)
• The general contractor (or reputed contractor)
• The construction lender (if any)

Prelien handles the entire preliminary notice process — from generating the notice to certified mail delivery. Learn more on our California preliminary notice guide.

Step 2: File a Mechanics Lien

California Civil Code §8400–§8494

The mechanics lien is the most powerful payment remedy available to subcontractors. It places a legal claim directly on the property where you performed work, encumbering the title and making it difficult or impossible for the owner to sell or refinance until the lien is resolved.

Prerequisites

• You must have served a preliminary notice (Step 1)
• You must have actually furnished labor, services, equipment, or materials that improved the property
• There must be an unpaid balance owed to you

The 90-day deadline

A mechanics lien must be recorded with the county recorder within 90 days after completion of the project or cessation of work. Miss this window and you lose the right to lien entirely.

The enforcement deadline

After recording the lien, you have 90 days to file a lawsuit to enforce it. If you don't initiate a foreclosure action within this period, the lien expires and becomes unenforceable. The property owner can also petition to release the lien if you fail to enforce.

Why it works

A mechanics lien is often called the "nuclear option" because of how seriously it affects the property. Title companies will flag the lien, lenders will hold back funds, and the property owner faces a potential forced sale. This creates enormous pressure to resolve the payment dispute quickly.

For a deeper dive into the filing process, see our California mechanics lien guide.

Step 3: Serve a Stop Payment Notice

California Civil Code §8502–§8520

A stop payment notice is a powerful alternative (or complement) to a mechanics lien. Instead of encumbering the property, it traps construction funds held by the owner or the construction lender, preventing those funds from being disbursed until your claim is resolved.

Two types of stop notices

• Unbonded stop notice — Served on the property owner or general contractor. The recipient must withhold sufficient funds to cover your claim. No bond required.
• Bonded stop notice — Served on the construction lender. Requires the claimant to post a bond (typically 125% of the claim amount). The lender is then obligated to hold funds from the construction loan to cover your claim. This is particularly powerful on large projects with construction financing.

When to use it

A stop payment notice is especially useful when:

• There is a construction lender whose funds you can trap
• The property is owner-occupied (where mechanics lien rights may be limited)
• You want to secure payment without encumbering the property title
• You are using it alongside a mechanics lien for maximum leverage

For more details, see our California stop payment notice guide.

Step 4: Lien Waivers — Know What You're Signing

California Civil Code §8132–§8138

Lien waivers are the other side of the coin. While the tools above protect your right to get paid, lien waivers are documents that give up those rights — usually in exchange for payment. Understanding the difference between conditional and unconditional waivers is critical for every subcontractor.

The 4 California statutory waiver types

• Conditional Waiver on Progress Payment (CC §8132) — Waives rights for a specific payment, but only after the check clears. Safest for progress payments.
• Unconditional Waiver on Progress Payment (CC §8134) — Immediately waives rights upon signing, regardless of whether the check clears. Use with caution.
• Conditional Waiver on Final Payment (CC §8136) — Waives all remaining rights, but only after the final payment clears.
• Unconditional Waiver on Final Payment (CC §8138) — Immediately and permanently waives all lien rights. Only sign after full payment is confirmed.

The golden rule for subcontractors

Never sign an unconditional waiver before the payment has fully cleared your bank account. If the check bounces or the payment is reversed after you've signed an unconditional waiver, you've permanently lost your lien rights for that amount with no way to recover them.

Conditional waivers are always the safer choice for progress payments. They only take effect once the payment is actually received and processed.

Read our full California lien waiver guide and learn the difference between lien waivers and lien releases.

Key Deadlines for Subcontractors

Every lien right has a strict deadline. Miss one and you may lose that remedy permanently. Here are the critical windows to track:

Pro tip: Don't wait until the last minute. Start the preliminary notice process on Day 1 of every project. Prelien can automate this so you never miss a deadline.

Common Mistakes Subcontractors Make

These are the errors we see most often. Every one of them can cost you your lien rights entirely.

How Prelien Helps Subcontractors

Prelien was built to help subcontractors, contractors, and suppliers protect their payments without needing a law degree. Here's what we handle:

• Preliminary notices — Generate and send California-compliant preliminary notices via certified mail, with tracking and proof of delivery
• Deadline tracking — Automated reminders so you never miss a 20-day, 90-day, or enforcement deadline
• Lien waiver management — Create, send, and track all four statutory lien waiver types with electronic signatures
• Project organization — Keep all your notices, waivers, and project parties in one place across every job

We focus on prevention — making sure your lien rights are preserved from day one so you have maximum leverage if a payment dispute arises.

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