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about mechanic lien

hi,thanks for having a chance to get a help! i am a licensed contractor who had a residential remodel job with property owner,but owner stopped our contract at midway,and refused to pay a $4500 for labor which we already have done 65% of our project. and owner ignoned my text massage about what s un paid reason .rememberd that owner insisted contractor mislead her not get permit for her project, in fact ,it s not true! so , my question is that i could apply a mechanic lien on her property? or better to go to samll claim? hope to get respond asap!

1 reply

Nov 25, 2019

When unpaid for construction work, leveraging the right to file a mechanics lien is a great way to force payment. And, mechanics lien claims will generally be available even if there's a dispute over workmanship and even if there's a dispute as to what's owed. Let's first look at some options for recovering payment before filing a lien becomes necessary. Then, we can look to California's mechanics lien rules and other options outside of the mechanics lien process.

Recovering payment without actually filing a lien

One option for recovering payment is to send demand letters on the debt that's owed and unpaid. A demand letter will usually contain specific legal threats in order to show recipients that the sender is serious about getting paid and is willing to do what it takes to obtain payment. More on that option here: Demand Letters for Contractors – How To Write One That Gets You Paid. Escalating things a bit further with the threat of a lien claim can help to get paid, too. A document like a Notice of Intent to Lien acts like a warning shot - it informs recipients that is payment isn't made and made soon, then a lien will be filed on the job. And, considering how problematic mechanics lien claims can be for an owner, they'll generally want to do what they can to avoid a lien - especially when that's as simple as actually paying their debts. For further discussion: What Is a Notice of Intent to Lien and Should You Send One?

Contractor's right to lien in California

California contractors are broadly entitled to mechanics lien rights. However, there are some timing considerations to take into account. Direct contractors can't file their mechanics lien until they've "completed" the direct contract, but must file before the earlier of the following two dates: (1) 90 days after completion; of (2) 60 days after a Notice of Completion or Cessation is recorded.

When does "completion" occur when a direct contractor is terminated?

Unfortunately, this is a complicated question to answer. The California Civil Code actually dedicates § 8180-8190 of the code to the timing of completion. Under § 8180(a), completion occurs when any of the following events takes place: (1) actual completion; (2) occupation or use by the owner, along with the cessation of labor; (3) Cessation of labor for a continuous period of 60 days; or (4) recordation of a Notice of Cessation after a cessation of labor for a continuous 30 days. So, based on the above, a direct contractor may need to wait a bit before filing their lien claim. However, if the contractor has formally been terminated, then their work on the job might be deemed "complete" based on that termination - and waiting may not be necessary.

Other recovery options

Of course, keep in mind that there are always other options outside of the mechanics lien process that can help with recovery. Things like breach of contract claims, prompt payment claims, or even wrongful termination might be on the table when an owner has acted improperly and failed to make payment. To best determine what legal options might be on the table, though, it might be wise to reach out to a local California construction attorney - like one of Levelset's California Payment Experts - for more insight.

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