Multiple contracts invoke Civil Code §8186 (former§3117) which can be fatal to mechanic’s lien claims. Section 8186 provides when projects are built pursuant to more than one “direct” contract, with each contract covering a particular portion of the work, the owner may record separate notices of completion for each particular portion of the work performed under each contract, rather than waiting for completion of the project as a whole. This affects the time to record a mechanics lien. (See also Gunther v. McCormick (1922) 60 Cal.App. 350) For example ….
An examples is when the owner contracts for grading and excavation in a contract separate from the contract for framing, or other work on the project. After tgrading and excavation work is completed, the owner can then record a Notice of Completion. That Notice of Completion, starts the statute of limitations running for any lien claimants performing grading and excavation work. Although the work on the rest of the project may take another year to complete, the lien claimant who did grading and excavation work must record the lien based on the record date of the grading/excavation work Notice of Completion. Thus, if the owner and general contractor choose to enter into two or more contracts for various portions of the work, even with the same subcontractor, the time in which a lien claimant must record a lien will be less than if there were only one contract. Failure to realize that more than one contract is involved destroys a contractor’s lien if that lien is based on completion of the wrong contract, or completion of the work as a whole. Subcontractor lien claimants must pay particular attention to the contractual arrangements on the project to avoid this potential trap that will deprive them of their lien rights.