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Can a CA licensed subcontractor take materials from a project after they are installed for lack of payment?

California

I am a lender that took back a property in foreclosure. The previous owner didn't pay multiple subcontractor for the materials and labor on the project. This subcontractor did not put a lien on the property. However even if he did, the lien would have been foreclosed out. The subcontractor, the electrician, came to the property over the weekend and ripped out all of the rough electric, cans, plugs, etc.

1 reply

Jun 27, 2019

The short answer to this question is, "No." This kind of behavior is pretty strongly prohibited everywhere in the United States.

In fact, there was just a post about this on the Levelset Construction Payment Blog, highlighting a recent episode in Florida where this exact thing happened (landing the contractor in jail!): Florida Contractor Allegedly Sabotages Project Due To No Lien Clause.

Though this particular situation happened in Florida, the same rules apply in California. Whenever something is incorporated into a property, the materials become part of the property itself. If anyone goes into the property and starts ripping things out, taking things off, etc., then it's a crime. Even if a contractor, subcontractor, or supplier contributed those items to the property, once it's incorporated into the building, it's no longer their property at all. This is very clear in law. And when unpaid for those contributions, those party have the Mechanics lien available to them as a remedy. Period.

What is somewhat less clear is whether something has been "incorporated" into the property or not. Here is an article that explains the concept of "incorporation" of materials into a property.

Even in the case that the materials were not formally "incorporated" into the property, though, the contractors and suppliers would still be limited in their remedy. They would need, for example, a UCC lien, or something else, to go onto the property and get the materials back. Just walking on and taking it...is just not available. And if they went about and did this anyway, like the situation in Florida, they could be charged criminally, or you can bring a claim against them civilly.

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