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can I file a lien

as the contractor, sometimes we have jobs where we only do the remediation for water, mold, or asbestos. This would entail “alteration…demolition, or removal, in whole or part… to, a building…” pursuant to 8050(a)(1). However we were advised by an insurance company that since we did not do the rebuild or put back that we could not file a lien. Please advise. Thank you.

1 reply

Mar 4, 2020

Mechanics lien rights are generally available to those who provide a permanent improvement to the project property. In California, a claimant who has provided work for a work of improvement will be entitled to lien rights. And, as you quoted above, California Civil Code § 8050 defines a work of improvement to include "Construction, alteration, repair, demolition, or removal, in whole or in part..." of a building and other structures. Certainly, physically repairing damage caused by mold and water would seemingly give rise to mechanics lien rights. And, the removal of asbestos should also give rise to mechanics lien rights. However, using equipment to remove water and mold from the given property may fall into a bit of a grey area since it doesn't easily fall in line with other work that is traditionally lienable. On one hand, water removal and mold removal do provide a permanent improvement to the property which, if left unattended, would destroy the property. So, that remediation is a lot like any other part of the property that'd need repair and may well serve as a sound basis for a mechanics lien. On the other hand, water and mold remediation is far less tangible than other lienable work. And, "removal" usually refers to demolition or physical separation of parts of an improvement - not to water or mold that's taken hold of the property. Finally, keep in mind that the owner or insurance company has every interest in keeping the property free and clear of lien claims. And, their opinion as to whether specific work would give rise to mechanics lien rights should certainly not be taken as gospel. But, for a deeper dive into what kinds of work are or are not lienable in California, it might be helpful to reach out to a California construction attorney who can review the project documentation and specific work that was done.

Other recovery tools will help to recover payment before a mechanics lien becomes necessary

Lastly, note that mechanics liens usually won't be necessary when the proper steps are taken to make sure payment is made on the job. These steps start on day 1 by sending a preliminary notice, regardless of whether one is required. And, if payment is coming slowly, using regular payment reminders can prod a customer into making payment before the dispute snowballs. Once the dispute starts to escalate, using a tool like a demand letter can let the customer know you mean business and are willing to do what it takes to make sure payment is made. And, threatening to file a mechanics lien by sending the customer, owner, insurer, etc. a Notice of Intent to Lien can put everyone on notice that the dispute could wreak havoc on the project if it isn't dealt with. While the above steps can go a long way toward making sure payment is made, mechanics lien claims may still be necessary at times. In those instances, I think these resources will provide a lot of value: (1) California Mechanics Lien Guide and FAQs; and (2) How to File A California Mechanics Lien – Step By Step Guide To Get You Paid.

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