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Disputing a mechanic lien

California

I'm a subcontractor who finished work in California in early July. Sunbelt rentals overbilled me, and has now placed mechanics liens for unauthorized charges on the property owners, which is placing me in breach of contract and holding up payments to me.

4 replies

Nov 4, 2020

The quickest way to release the lien from the property to avoid disputes with the property owners would be to secure and record a mechanic's lien release bond. This bond releases the lien from the property and instead attaches the lien to the bond. That way you can proceed to resolve whatever disputes you have with Sunbelt without interrupting other payments. The downside to this approach is that recording a release bond extends the deadline for Sunbelt to file legal action on that bond to 6 months from service of the bond on Sunbelt. Without the bond, the lien will expire 90 days from recording if an action is not filed to enforce it. 

Ultimately, you just need to figure out a way to resolve your contractual dispute with Sunbelt. But if your need to act on the lien quickly to avoid issues with the owner, a release bond may be your best bet. 

If you have further questions, feel free to email me at ryan@huntortmann.com and we can set up a call.

 

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Nov 5, 2020

 If Sunbelt's lien is improper, you can obtain a mechanic's lien release bond, which will require Sunbelt to release the lien.

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Nov 5, 2020
Did Sunbelt serve a 20-day preliminary notice on the project? If not, then the lien is invalid. Also, did you obtain statutory release forms as you were issuing payments to Sunbelt along the way? If so, you should review those as well to determine if the lien is overstated. Finally, the owner will likely demand that you either bond around the lien or resolve it promptly so the lien is removed as a cloud on title to his/her property.
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Nov 5, 2020

You should consider paying the undisputed amount (and obtain a waiver and release based on the amount of the payment), bonding around the claim (which will be less as you've paid the undisputed amount) and then litigating over the disputed portion.  

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