Home>Levelset Community>Legal Help>Do I need a licence to file a mechanic lien and is there a cap if no licence

Do I need a licence to file a mechanic lien and is there a cap if no licence

CaliforniaRight to Lien

I've consulted in saving and getting a hard money loan to repair. Our agreement is I general the project ,deal with all facets of this drug attic infested, code enforcement vacated. Free and clear property. I proposed turning into a state foster business as partners. I told her I want 100,000 to save it or 20k if partners in business. All quotes for construction were 80k to 100k . I would do and outsource work for 50k. As part of my vested interest. 30k in she reneged

1 reply

May 20, 2019
That's an interesting question. First, it's worth mentioning that for a party who owns the property (including part owners), licensing is not required in order to perform improvements to the property under the CSLB's Owner-Builder exemption. So, for builders who have an ownership interest in the property, the licensure rules typically won't apply. And, where an ownership agreement was in place but ultimately not fulfilled, there may be an argument to be made that the contractor was, in fact, an owner-builder when the contractor was contractually entitled to part ownership of the property (via partnership interest in the underlying property, or otherwise).

However, when the builder has no interest in the property, the general licensing rules will apply, and in California, that means performing significant construction work without a license (when the work exceeds $500) will generally leave the contractor without the ability to file a mechanics lien and potentially without any available remedy to recover payment. You can learn more about California's licensing rules here: California Contractors License and the CLSB: Understanding the Rules.

Of course, it's worth noting that even in a situation where lien rights might not be available, sending a warning document like a Notice of Intent to Lien could be helpful to recover payment. Because a mechanics lien is such a drastic remedy, the mere threat of lien often helps to compel payment - regardless of whether the claimant actually can or will file a lien. Of course, for savvy property owners familiar with rules on licensing and lien rights, that might be less effective.
0 people found this helpful