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A contractor I didn't interact with filed a mechanics lien on my home. What can I do?

A contractor (friend) owed me money. He did work on my house as a payoff for part of the money. The work included installing some stones for the house new look. Apparently the company that supplied that stone and delivered to my house did not get paid and they put a mechanical lien on my house. Am I responsible? I have no contracts with neither the contractor or the company that supplied the goods.

10 replies

Mar 20, 2020

Generally, the ability to claim a mechanics lien against a property is not subject to whether or not the party claiming a lien had a contract with the property owner. In fact, much of the power of a mechanics lien comes from the fact that it encumbers the property and impacts parties other than the party with whom the claimant directly contracted. However, there are specific rules and requirements that must be met in order for a lien claim to be effective, valid, and enforceable. In California, lien claimants are required to send a preliminary notice to protect the ability to file a lien. In order to protect the full value of all labor or materials furnished to the project, the notice must be sent within 20 days from the claimant's first furnishing of materials or work. The notice can still be partially effective if sent later, but will only protect the ability to file a lien with respect to the value of the labor/materials provided beginning 20 days prior to sending the notice. There are also form and timing requirements for the lien itself. A California mechanics lien must be filed within 90 days from the completion of the project, although that period can be shortened if a notice of completion/cessation is filed. The lien itself must meet certain specific content requirements, and must be filed in the county recorder's office. And, a copy of the lien must be served on the owner of the property.

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Mar 20, 2020

I am sorry but that still did not answer my question. Your reply is like a computer generated answer about dates of the lien filing etc. Please read my question carefully. Am I responsible to clear that lien although I never dealt with the supplier and the contractor got the money. Should the contractor be responsible ? Thank you.

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Mar 20, 2020

The property itself is encumbered by the mechanics lien, and if the lien is valid and the claim is not satisfied the property can be foreclosed on and sold to satisfy the debt. If you already paid the contractor, then you would have a claim against the contractor. Additionally, in any action to enforce the lien, the contractor will be made a party, and to the extent was paid for the work will need to satisfy their own contractual obligations. However, if the contractor is unable to pay because of bankruptcy filing for example, the property remains obligated.

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Mar 20, 2020

Thank you for the answer. One more thing, remember thar contractor is a friend. How long do I have before taking a legal action and not jeopardize the friendship? Thank you again.

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Mar 20, 2020

A lien doesn't encumber a property forever, and an action to enforce must be initiated within a certain time period or the lien will expire. In California, that time period is only 90-days from the date on which the lien was recorded. So, if the property owner waits and more than 90 days elapse from the date the lien was recorded, the lien is no longer valid and enforceable, and the claimant will be forced to recover through some other mechanism - like a suit against the contractor directly. The property owner has the ability to just wait and see if anything happens, and if it does just make sure the contractor is a party to the enforcement action, there is no specific necessity in proactively asserting a claim against the contractor prior to any attempted foreclosure of the lien.

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Mar 20, 2020

I am so sorry Nate but I am a simple person and your reply is hard to digest. I am the owner of the property and I am the one who got the lien on my house. So if I understood it right, I should not make any move and let the merchant solve the problem with the contractor? Am I out of it then? Thank you and sorry for your trouble.

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Mar 21, 2020

No problem, I'm sorry I wasn't clear. As a property owner, you don't need to take any action with respect to the lien until the lien claimant attempts to enforce the lien. If 90 passes from when the lien was filed without the claimant starting a lawsuit to enforce, the lien will expire and is no longer a threat to your property. Likewise, you don't need to take any action with respect to your friend the GC. If the lien expires and becomes unenforceable, you will be able to remove yourself from the situation and the claimant and contractor will have to work it out themselves. If the claimant does attempt to enforce, the GC will also be a party - so you don't need to be the one that is starting the claim against the GC right now, if you want to preserve the friendship.

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Mar 21, 2020

Thank you very much Nate. But what if the claimant attempted to enforce the lien before the 90 days expires? Then what would be the case? And when do I have to worry and lose the friendship and see a lawyer? I really appreciate your help Nate.

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Mar 21, 2020

If the claimant attempted to enforce the lien, that's a full blown lawsuit and you should enlist the help of a lawyer. Since the lien is claimed by a subcontractor, California law requires the GC defend the action at the contractor’s own expense. So, if for some reason the claimant doesn't name the GC in the lawsuit, your lawyer would make sure the GC is involved. Further, the owner is protected against double payment because any judgment against the owner in an enforcement action arising from a subcontractor's lien is to be borne by the GC. California law states that ". . . if the owner has settled with the direct contractor in full, the owner may recover from the direct contractor, or the sureties on a bond given by the direct contractor for faithful performance of the direct contract, the amount of the judgment and costs that exceed the contract price and for which the direct contractor was originally liable." Hopefully it doesn't get to that point, but if the claimant files suit to enforce the lien, you need a lawyer and the GC becomes an adverse party (if they don't just pay the claim).

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Mar 21, 2020

Thank you Nate, I really appreciate your response. I just like to remind you again, that contractor is a friend and owes me money and I have no contract for the work between us except a text for the Itemized cost. Does that mean I just wait and do nothing? And am I at all in jeopardy? I hope I am not bothering too much. Thank you Nate.

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