Home>Levelset Community>Legal Help>A General Contractor (California) took out the permits on a home renovation project that I had. He never presented me with a contract. Money was never given to him as I ended up hiring a project manager to finish my $400,000 renovation. The General Contractor now presents me with a mechanics liens for $95,000. No contract. No work. What is my best recourse to get the mechanics lien off the property as I intend to sell the home soon?

A General Contractor (California) took out the permits on a home renovation project that I had. He never presented me with a contract. Money was never given to him as I ended up hiring a project manager to finish my $400,000 renovation. The General Contractor now presents me with a mechanics liens for $95,000. No contract. No work. What is my best recourse to get the mechanics lien off the property as I intend to sell the home soon?

I am the POA to an LLC that owns the home where renovations took place. The GC did pull the license then abandoned the project. I had a project manager do the work with subs. GC never pulled off his license. The project is now complete. The GC filed a mechanics lien in the amount of $95,000. No contract was entered into for the home improvement renovation project. The GC did not expend any money as I paid for all the work and workers. Is the GC's mechanic's lien valid?

2 replies

Jul 25, 2019

Great question. While the validity of a filed lien would ultimately be up to a court to decide (if it came to that), let's take a look at California's rules on what amounts can be liened. Those should provide some insight, and that's what a court would use anyway. After that, we can look at some options for having a mechanics lien claim removed

Validity of the lien § 8430-8434 of the California Civil Code limit what amounts can be included in a mechanics lien. Under § 8430(a), a California mechanics lien is limited to the lesser of: (1) The reasonable value of the work provided by the claimant. (2) The price agreed to by the claimant and the person that contracted for the work. So, if a claimant has filed a mechanics lien and the amount on that lien exceeds the value of the work that claimant provided, themselves - then their lien may well be invalid as a result.

While an improper lien amount could be enough to invalidate a lien by itself, there are some other crucial factors in play here. Most notably, California is very strict about home improvement contracts. If the requirements for a home improvement contract aren't followed - including a written contract with lots of mandatory language - a contractor can be severely hamstrung when trying to recover payment, including via mechanics lien. So, regardless of the issues described above, if a proper Home Improvement Contract wasn't executed, a lien claim might fail on that basis alone.

Removing a filed lien
Having a lien claimant release their own claim will pretty much always be the fastest way to have a lien removed from the property title. Granted, no claimant wants to release their lien without first getting paid. However, an owner might be able to compel a lien claimant to release their lien claim if they can show the claimant that the lien is obviously flawed and won't lead to payment - especially when the owner can show that the lien claim will also lead to liability for the lien claimant. As Levelset discusses in this article, when a mechanics lien is willfully and knowingly exaggerated, the lien claimant may have filed a fraudulent or exaggerated mechanics lien. If that's the case, the claimant may become liable for any damages suffered as a result - like, potentially, a lost sale of the property. By sending a letter demanding that the claimant release their lien, along with proof showing their claim is improper and threats to seek damages against the claimant if the lien isn't released, an owner may be able to get a lien claimant to release a lien claim on their own. When sent via attorney, it might carry a little more weight.

Another option may be to bond off the filed lien. In California, when a mechanics lien has been filed, and when the owner needs to quickly get the lien removed from the property title, the owner can file a surety bond with the county which then transfers the lien claim off of the owner's property and onto the filed surety bond. This doesn't make the claim disappear, but it does at least get it off the title of the property and it buys some time to resolve the dispute. However, bonding off a lien can be an expensive option.

Finally, an owner can always challenge a filed lien in court, and if the court determines that the claim is improper, the owner can have the lien removed and can potentially win damages, attorney fees, etc. While this is likely not the fastes way to get a lien removed from the property title, it could be a very effective option. In fact, merely threatening to challenge the lien might be enough to get the lien claimant to remove their claim.

Finally, keep in mind that when a contractor has taken actions that might not be in line with licensure requirements, filing a complaint against that contractor is always an option. While reporting a GC to the California Contractors State Licensing Board might not directly get a lien removed, threatening to file a complaint might be good leverage, and actually following through with a complaint could certainly be proper.

Lastly, here's a resource I think might be valuable here: A Mechanics Lien Was Filed on My Property – What Do I Do Now?

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Oct 3, 2022

Maybe you can tell me where to buy new windows to the house? Not so long ago I started doing repairs and I need to replace the old windows in my house!

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