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Can a General Contractor's employee put a mechanics lien against the customer?

I work for a Solar Contractor as a W-9 employee in the sales department. (Salary plus commissions) I sold a $1.5M dollar solar project which we have 99% completed. The customer has paid all suppliers and subcontractors directly per the agreement. There is still a milestone balance left (approx. 5% of the contract price) plus a 10% holdback that will be due in February. I worked as the salesperson to get the job and then as project manager throughout the project (which I was kind of forced into without any additional pay) Normally I would have been paid all my commission by now but not on this job. Our owner is having a challenge getting anymore monies from the customer. I am afraid that I will not see my commission balance owed to me. Can I put a mechanics lien against the customer for my commission amount while they have a balance owed to us?

1 reply

Jan 22, 2018

I'm sorry to hear about that. Before getting into the weeds too much, it's important to determine if the work provided is the type of work for which mechanics liens may be filed in California. If payment is owed as a result of the sales function of this job rather than the project management portion, the work might not be lienable - sales is not contemplated as lienable work under the California mechanics lien statute.

In the statute, lienable work is defined as "labor, service, equipment, or material provided to a work of improvement." As you'd mentioned, no payment was anticipated as a result of the project management function of this particular job - so it may be a hard argument to assert that payment is owed as a result of providing lienable work. Also, note that whether construction managers are entitled to lien rights is still a bit of a grey area in California (though zlien believes they are - as mentioned in this article and this one).

Modes of recovery other than a mechanics may be a safer bet for this situation, but it's possible that a mechanics lien could be filed for the above situation - whether or not to file a lien will ultimately be your decision. Keep in mind that while penalties are possible for filing an improper lien, unless the filing is intentionally fraudulent, such penalties can typically be avoided (more on that, here).

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