Financial Alert: California graphic overlaid on stock photo of luxury home

A breathtaking $32M Santa Barbara home is now at the center of a developing financial struggle between a California developer and a long list of unpaid contractors.

Facing mounting debts and legal actions, the developer, DLJJ & Associates LLC, has filed bankruptcy and placed the home on the market.

Though the profits from the sale would make up for the business’ debts, a number of outstanding mechanics liens may make any sale challenging, leaving unpaid contractors in an uncomfortable spot.

Stuart Rubin —  believed to be the same Stuart Rubin at the helm of the also bankrupt Glenroy Coachella LLC Hotel Indigo development — is listed as a co-owner of the property along with his wife, Annete.

The Rubins are the owners of DLJJ, and have assigned a 20% ownership stake of the home to their company, according to lien filings.

According to a property report, the Rubins first purchased the home in 2007 for $7.5 million ($10 million in 2021 dollars). Over the years, they spent a small fortune to renovate the house and turn it into the showcase it is today.

If the current asking price of $32 million is met, the Rubins will see a return of over triple (220%) their initial purchase price in just 14 years (after accounting for inflation).

But years of financial disputes, non-payment for construction work, and even allegations of fraud appear to be creating an uncomfortable situation for the Rubins. The sale of their $32 million home, which would likely be their saving grace, may turn out to be difficult or even impossible to complete.

While a $32 million payout sounds like more than enough to cover the Rubin’s outstanding debts to their contractors, that might not be the case: The sale of the Rubin’s Santa Barbara home might not be the quick financial solution they’re hoping for, as there are still two active mechanics liens on the property.

Mechanics liens are incredibly powerful tools for contractors seeking payment and can seriously jam up any sale of a property. Prior to a sale, a simple title search on the home would reveal the outstanding liens, and $32 million is certainly a hefty price tag for a home with potential title issues or ongoing litigation.

Prestige Pool Services, which is foreclosing on, otherwise known as enforcing, their mechanics lien for $13,900 in unpaid pool servicing and materials, are among several other contractors currently seeking reimbursement for unpaid work that went into the Santa Barbara home’s renovations.

Learn more: The Lien Foreclosure Process Explained

According to various liens and bankruptcy filings, companies owned by the Rubins currently owe a total of $47,100 to the following contractors:

  • $13,900 to Prestige Pool Services
  • $20,200 to Surface Solutions Custom Painting
  • $7,800 to Avila Builders
  • $5,000 to Lee & Sons Plumbing & Heating

The Rubin’s property businesses have also dealt with sizable payment disputes in the past:

  • $133,00 to McCoy Electric 
  • $6,00 to Marcus Madrigal
  • $2,800 to Wilson Environmental Contracting
  • $2,500 Down to Earth Landscaping, Inc.

“[The liens] could definitely delay the sale of the home,” says Matt Viator, Senior Legal Associate at Levelset. “Even though the amount of the outstanding liens likely pale in comparison to the home price and might not scare off buyers by themselves.”

However, “if there’s ongoing litigation or other issues that’d cause delays, that could definitely put [potential buyers] into a ‘this is more trouble than it’s worth’ mindset,” Viator says.

Fortunately, contractors seeking payment will have a course of action regardless of the outcome of the sale.

A successful sale would free up some funds for the Rubin’s to pay their contractors with. If the Rubins cannot find a buyer or the sale of the home is delayed, Viator noted that payment would simply “fall in line with standard mechanics lien recovery, just on a larger scale.”

“If the lien is foreclosed, there may eventually be a forced sale of the property whereby lienors could be paid from the proceeds. Granted, with a house like this one, that’s extremely unlikely,” according to Viator.

“The lienors could also just settle with the owners directly,” said Viator, “or the related parties could come to some combined settlement situation where a title company will pay the lienors from the proceeds of the sale, simultaneous with the purchase.”

Viator notes there’s no reason why the parties can’t get creative with the settlement. “For example, the buyer could directly pay the lienors for the release of their liens, and then pay a discounted price for the home.”

The sale of the luxury home will likely make California headlines, and it will certainly be an interesting proceeding to monitor. Fortunately for the contractors who helped renovate it, they should manage to recover any outstanding payments regardless of the outcome of the sale.