Q: Does the new mechanics lien law operate differently than the old law?

A: The new law operates much like the old law; however, there are improvements intended to make it easier to administer the process. It is now easier for an owner to learn that a lien will be or has been recorded and easier for contractors to learn the identity of construction lenders.

The content, manner of service and proof of required notices is now more standardized. Notice must be given in writing, which “includes printing and typewriting” but does not include electronic notice. The owner now has 15 days to record a Notice of Completion rather than the previous 10-day period. Also, mechanics lien release bonds are now required to be 125% of the amount of the lien rather than 150% under the previous law.

On private works of improvement, the right to record a lien now begins at actual completion of the work of improvement, rather than the owner’s acceptance of the work. A lien claimant must now give notice to the property owner that it intends to record a lien and must record a Notice of Pendency of Action within 20 days after filing an action to enforce a mechanics lien, making the existence of the action a matter of record for title searches. General contracts and subcontracts must now contain information about construction lenders and if a new construction loan is obtained after commencement of the work, the owner must identify the new lender to each entity that gave a preliminary notice.

Q: What are the differences in the statutory waivers and release?

A: The new forms of statutory waivers and release are substantially similar, but not identical to, the old forms. The new forms are formatted differently. The form of conditional waiver and release includes an exception for previously submitted but unpaid progress payment requests, for which conditional waivers and releases had previously been given. The use of the new forms is mandatory, as was the case with the old forms.

Q: Are there any provisions of the new law that have a greater or different impact upon owners, designers or contractors than the old law?

A: The requirement that the owner receives notice of intent to record a lien, and that a Notice of Pendency of Action be recorded, benefit the owner. The ability of the owner to record a separate Notice of Completion for each direct contract also benefits the owner. The requirement that the owner identify the construction lender benefits the contractor and subcontractors. Design professions still have the same lien rights prior to commencement of the work of improvement, and the same mechanics lien rights afterwards. To the extent that the new law is more user friendly, it benefits all equally.