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Can a California subcontractor working for an unlicensed General Contractor file a lien?

CaliforniaMechanics Lien

I am a (licensed) California subcontractor who just discovered the GC on the project is unlicensed. It is coming time to get paid and I am worried there may be an issue. I understand that unlicensed contractors generally do not have lien rights in California - does that extinguish lien rights for subcontractors (and suppliers) who supply labor and materials to an unlicensed GC?

1 reply

Jun 8, 2018

That's a great question, and in some states, a general contractor's lack of licensure might destroy lien rights for all parties to a project. However, that does not appear to be the case in California. Section 7031 of the California Business and Professions Code limits the ability of an unlicensed party to recover via legal action and/or encumbering project property.

It does not, however, indicate that all parties on a project with an unlicensed contractor are unable to enforce legal rights or the right to lien. Because the section does not specifically address parties who are hired by unlicensed contractors, and because the purpose of this regulation is merely to punish those parties who fail to obtain the proper licensure, it follows that a properly licensed subcontractor would likely be able to proceed with their claim despite being hired by an unlicensed contractor.

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