Recent Developments In Construction Law

Construction law is constantly changing. A savvy contractor keeps abreast of those changes and adapts his business methods to conform to new requirements. Here are some recent legislative updates and court decisions that may affect your business.

Notice of Mechanic’s Liens Now Required 
As of January 1, Civil Code section 3084 now requires that lien claimants provide written notice to the property owner that the lien is recorded. The new law contains specific language and font size requirements. Most importantly, failure to provide the notice as required renders the lien unenforceable.

Notice of Pendency of Action to Become Mandatory
As of January 1, 2011, Civil Code section 3146 will mandate that a Notice of Pendency of Action (Lis pendens) be recorded within 20 days of the filing an action to foreclose a mechanic’s lien. Current law does not require the recordation of a Lis pendens. It is unclear if a failure to timely record the notice will affect the validity of the lien.

Unlicensed Contractors Ordered to Disgorge 
In White v. Cridlebaugh (2009) 178 Cal. App. 4th 506, the court of appeal recently held that an unlicensed contractor was required to reimburse an owner more than $80,000 for construction work performed while unlicensed. The appellate court found that Business & Professions Code section 7031(b) was designed to treat consumers consistently, regardless of whether or not they already paid the contractor for unlicensed work. Section 7031(b) protects an owner from suit for payment by an unlicensed contractor. This case now makes clear that unlicensed contractors cannot avoid the effect of the statutes by collecting prepayment before undertaking work or by retaining progress payments for completed phases of work.