California Supplemental (CSE) Practice Exam

When an owner files a Notice of Completion, what happens to the lien period for prime contractors?

1. The lien period is eliminated

2. The lien period is extended to 90 days

3. The lien period is reduced to 60 days

4. The lien period remains the same

The correct answer is: The lien period is reduced to 60 days

When an owner files a Notice of Completion, the impact on the lien period for prime contractors is significant. Specifically, this notice serves as a formal declaration that the construction project has reached completion, which subsequently shortens the period during which prime contractors can file a lien against the property. In California, when a Notice of Completion is filed, the lien period for prime contractors is reduced to 60 days. This means that after the notice is recorded, prime contractors have a shorter timeframe in which to assert their lien rights. Prior to the notice being filed, the lien period could be as long as 90 days from the completion of work without a notice. By filing this notice, owners effectively tighten the timeline, which can help protect them from potential claims against the property for unpaid work. This reduction encourages prompt payment to contractors and provides clarity on the completion status of the project, thus helping to protect the interests of property owners as well as facilitating better project management and resolution of outstanding obligations.