Hello, We do 3D models and job site laser scanning of constructions utilities for contractor's use. Do we have lien rights as a business? Can we prelien projects?
Mar 27, 2019
These are interesting questions. First and foremost, it's worth noting that regardless of whether a construction business could ultimately file a mechanics lien for the work they perform, sending a preliminary notice is a good idea. Preliminary notices do much more than simply preserve the right to lien - they promote communication and collaboration on construction projects. What's more, when a preliminary notice is sent, it catches the attention of the contractor and the owner - so even if a mechanics lien might not be available, by sending preliminary notice, a construction business might be able to establish the appearance that a lien could be filed, if necessary. zlien discusses that idea in this article: Why You Should Send Preliminary Notice Even If It’s Not Required.
Anyway, regarding the ability to lien, mechanics lien rights are generally reserved for those who have performed labor or services on the improvement, or those who have provided materials for the improvement, and their work has resulted in a permanent improvement to the property. Where some work goes into the project, but that work doesn't directly result in a physical improvement, the availability of lien rights might come into question.
Looking to § 8400 of the California mechanics lien statute, "A person that provides work authorized for a work of improvement" will be able to file a lien claim. The term "work" is defined as "labor, service, equipment, or material provided to a work of improvement." The term "labor, service, equipment, or material" is also defined, and it includes (but isn't limited to) "labor, skills, services, material, supplies, equipment, appliances, power, and surveying, provided for a work of improvement." Note also that lien rights are available for "design professionals" in California, and that term refers to licensed architects, licensed professional engineers, and licensed land surveyors - but it does not specifically refer to "consultants". Ultimately, when a claimant is looking to determine whether they'll be entitled to mechanics lien rights, they'll have to determine whether their work soundly falls into the work described above. Unfortunately, the California Civil Code doesn't provide a ton of clarity as to what might constitute "services". But, as mentioned above, when work doesn't directly result in physical improvement, often, lien rights won't be available. Regardless of whether a lien can or will be filed, there may be an opportunity to leverage the mere warning or threat of lien into compelling payment. Because a mechanics lien is so powerful, the mere threat of a lien claim can get the ball rolling on payment - especially when a more formal document, like a Notice of Intent to Lien, is utilized and sent to all higher-tiered parties. When an owner and contractor receive a Notice of Intent to Lien, they know that the claimant is serious about payment, and sending the lien warning to the owner as well as the contractor can help to put extra pressure on the contractor to ensure that the issue is resolved. Finally, when construction businesses utilize preliminary notices, and when they leverage the potential for a lien via a document like a Notice of Intent to Lien, typically, actually filing a lien claim won't even become necessary. For more information on California's mechanics lien and notice rules, this resource should be valuable: California Lien & Notice Overview.