BILL NUMBER: AB 568	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 20, 2002
	AMENDED IN SENATE  APRIL 8, 2002
	AMENDED IN ASSEMBLY  MAY 2, 2001
	AMENDED IN ASSEMBLY  MARCH 27, 2001

INTRODUCED BY   Assembly Member Dutra
   (Principal coauthor:  Assembly Member Vargas)

                        FEBRUARY 21, 2001

   An act to add Section  3113   3125  to
the Civil Code, relating to mechanics' liens.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 568, as amended, Dutra.  Mechanics' liens.
   The California Constitution gives workmen the right to a mechanics'
lien for the value of labor and materials provided for the
improvement of real property.
   Existing law sets forth the procedures for the enforcement of this
right, as specified.  Under these procedures, existing law requires
that a person record a preliminary 20-day notice, as specified, prior
to the recording of a mechanics' lien, prior to filing a stop
notice, and prior to asserting a claim against a payment bond, as
specified.
   This bill would provide that if a home improvement contract, as
defined, is executed in an amount not exceeding $25,000, 
regardless of later increases in the contract price,  the
homeowner may setoff the amount of good-faith payments to the
original contractor against the aggregate amount of enforceable
mechanic's liens and stop notice claims, in an amount not exceeding
$25,000  , as specified  .
   The bill would also provide that a homeowner's receipt of a
preliminary 20-day notice does not affect the good-faith nature of
payment by the owner.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  no.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section  3113   3125  is
added to the Civil Code, to read:  
   3113.  
   3125.   (a) Notwithstanding any other provision of this
title, if a home improvement contract is executed in an amount not
exceeding twenty-five thousand dollars ($25,000), the owner may
setoff the amount of good-faith payments to the original contractor
against the aggregate amount of enforceable mechanic's liens and stop
notice claims,  in an amount not   regardless
of whether changes in the contract have increased the contract price
to an amount  exceeding twenty-five thousand dollars ($25,000)
 , subject to the following limitations:
   (1) The setoff may not exceed twenty-five thousand dollars
($25,000).
   (2) The setoff does not apply to amounts that are due and unpaid
by the owner under the home improvement contract  .
   (b) An owner's receipt of a preliminary 20-day notice does not
affect the good-faith nature of a payment by the owner.
   (c) As used in this section, "home improvement contract" has the
meaning provided by Section 7151.2 of the Business and Professions
Code.