An Administrator's Guide to California Private School Law

Chapter 17 – Construction

school to the fact that its property might be subject to claims arising from contracts to which it is not a party and would otherwise have no knowledge. 2388 The claimant must give the school this preliminary notice not later than 20 days after the claimant first furnished work on the project. 2389 Most entities or individuals working on a project will serve the school the preliminary notice before they even begin working on the project. If a claimant fails to timely file this preliminary notice when originally hired, it will only be entitled to record a lien for work performed within the 20 day period prior to its service of a preliminary notice. 2390 A laborer, or a contractor who has a direct contract with the school, is not required to give the school preliminary notice. 2391 Contractors hired directly by the school to construct a project therefore need not serve a preliminary notice prior to putting a lien on the school’s property. 3. E NFORCING A M ECHANICS L IEN A ND R ELEASE O RDERS A claimant must commence an action to enforce a mechanics lien within 90 days after recording the lien. 2392 If the claimant fails to commence an action within that time, the lien expires and is unenforceable. 2393 The school and claimant can agree to extend the claimant’s time to file an action to enforce the lien for up to 1 year after completion of the project. 2394 The school may petition the court for an order to release the property from the lien if the claimant does not timely commence an enforcement action. 2395 The school must provide the claimant notice demanding it execute and record a release of the lien at least 10 days before filing the petition. 2396 Schools should consult with legal counsel prior to filing a petition to ensure they follow the proper filing requirements. A mechanics lien claimant may still file a personal action against the school to recover any amounts allegedly owed, even if their time to file a lien expired, or if the school obtains a release order. 2397 The claimant maintains these rights against the school even if it does commence an action to enforce its claim of lien. 2398 If a claimant files an action to enforce a mechanics lien for work provided to a contractor, the school may withhold from the contractor the amount of the lien claim during the pendency of the action. 2399 4. R ELEASE B ONDS If the school disputes the correctness or validity of the claim, it may obtain a release of lien by recording a lien release bond and provide a copy of the bond to the claimant. 2400 The bond must be equal to 125 percent of the amount of the claim and executed by an admitted surety insurer. 2401 A surety bond may be the school’s most effective protection against an unjustified or overstated mechanics lien. 2402 After the school records the bond, the court releases the real property from the lien and any action to foreclose the lien. 2403 The lien is not extinguished; rather the bond is substituted for the

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