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can a contractor who has actually done no work still successfully record a mechanic's lien?

CaliforniaMechanics LienPayment Disputes

I'll make this as brief as possible: Months after we hired a contractor, we discovered that they're very shady -- they've changed their business name multiple times to distance themselves from bad reviews, they've acquired new licenses from other RMOs after their old ones have been revoked, etc. We ultimately fired them after the contractor lied to our faces about his identity. We were simply in the blueprint phase and have paid just less than 8,000 dollars, but have never received blueprints. We recently made a bond claim to recover some of our money. In response, they've threatened that they "will have no choice but to record a mechanic’s lien on the property and initiate a lawsuit for foreclosure on said mechanic’s lien" unless we drop the claim. This seems to me to be a bullying tactic (and they've used this before on other Yelp reviewers under a different company name), but it has given me pause -- I'm not sure I want to risk legal fees trying to waive the lien. Do they have any burden of proof in recording the lien at all?

1 reply

Jun 18, 2018
I'm really sorry to hear about that. It's incredibly frustrating when laws meant to protect industry members are used to abuse processes and extort homeowners. First, it's worth noting that mechanics liens can typically be filed, regardless of whether the claim is valid. County recorders typically have neither the bandwidth nor the authority to review all claims submitted to be filed. However, if a party is required to be licensed in California and does not hold that license, a valid mechanics lien cannot be filed. In fact, the contractor cannot effectively utilize any legal remedy to recover payment. Further, while mechanics lien rights may be available for some pre-construction functions such as design work, if the contractor is not a licensed design professional (as defined by § 8014 of the California Civil Code), design work might not be lienable under the rules for a Design Professional's Lien pursuant to § 8300-8318 of the CA Civil Code. Plus, if the property was never actually improved, a traditional mechanics lien would likely not be able to be validly filed. Remember, though - this is not to say that a lien filing cannot occur. It merely means that a lien filed would likely not be valid. That is, if the lien is challenged or if the claimant attempts to enforce/foreclose their lien, they would likely be unable to do so. Plus, when a lien is fraudulently filed, penalties (including criminal penalties) can come into play. Granted, proving fraud can be tough. Notifying the contractor that their lien claim may be invalid and/or that legal actions may be taken against them can often be effective to ward off potential improper claims. However, such a threat could also escalate a dispute. Thus, if a lien filing or some other legal action appears to be imminent, it would be wise to consult a construction or real estate attorney to further discuss the matter. They'll be able to review all of the circumstances and documentation surrounding your claim and help decide on a plan of action.
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