Can I file a Mechanic Lien

2 weeks ago

We are en equipment lessor here is California. We have a customer (general contractor) that was renting equipment from us and they damaged a piece of our equipment. They have failed to pay the repair invoice but are currently still working on the project. We are past the 90 days to file the lien.

I recently filed a preliminary notice for another one of our customers that is working on the project. The preliminary notice named the same general contractor so I curious if this gave us any legal standing. The Levelset representative was not clear on what the date of completion would be seeing that the project is still ongoing and there is the potential for the customer to rent equipment from us again.

Where do we stand with this customer?

Thank you,

Attorney Hunt Ortmann Palffy Nieves Darling & Mah, Inc.
25 reviews

You have 90 days from project completion by all trades to file a lien so you still have time to file a lien on the amount owed, assuming you that sent preliminary notice originally. Whether a repair invoice would qualify as money for work on the work of improvement entitled to a lien is a little bit of a grey area. But assuming that the equipment was only being used for this specific project at the time, you have an argument that these amounts are lienable as they were incurred in furtherance of the work of improvement. Whether or not it makes sense to move forward with an action to foreclose the lien will depend on the amount owed. But the lien may provide sufficient pressure to recover payment. Remember, you have 90 days from recording the lien to move to foreclose it.

Disclaimer: NOTE: The information presented here is general in nature and is not intended nor should be construed as legal advice for any particular case or client. The content contained herein is published online for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. This posting does not create any attorney-client relationship and is neither intended to constitute an advertisement nor a solicitation.
2 found this helpful
Guest
Anonymous

Thank you for your insight. – Ash Ryan

Attorney Krogh & Decker, LLP
7 reviews

There is no black and white answer as to whether or not a lessor can file a mechanics’ lien.  Levelset actually has an article on this subject.  https://www.levelset.com/blog/can-equipment-rental-companies-file-mechanics-liens/.  

However, since the project is not over and you served a preliminary notice, you could potentially file and serve a mechanics’ lien claiming that you are a supplier to the project… as you supplied equipment.  The date of completion is the completion of the project, not your specific work.

Attorney Krogh & Decker, LLP
7 reviews

It is still unclear as to whether or not a lessor can file a mechanics’ lien on a construction project.  LevelSet has a pretty good article on this subject.  https://www.levelset.com/blog/can-equipment-rental-companies-file-mechanics-liens/

However, since you served a 20-day notice, you could try to file the mechanics’ lien.  It is an aggressive approach.  The completion date will be measured from the date of the completion of the project, not the date you completed your work.

Your answer or comment:
Are you a Registered Expert?
You are not logged in and will be posting
anonymously. Log in Now
Get answers from construction attorneys and payment experts
120 Character Limit