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final payment not received

Conditional waiver and release on progress payment form was attached to all invoices and the final 2 have not been paid. What actions should we be taking and what is the timeline we have left to request payment. We are licensed and bonded painting contractors. We sent out 1 late notice using certified mail and have proof of those letters being received and signed for by the owners, but it’s been a few months past due at this point and we have not received any communication or payment.

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Nov 26, 2019

When unpaid for work that permanently improves California property - like painting - the most powerful recovery tool available will typically be a mechanics lien. So, let's start by discussing some of the California mechanics lien requirements.

Requirements for filing a California mechanics lien

When hired by someone other than the property owner, the lien claimant must send preliminary notice within 20 days for first furnishing labor or materials. And, late notice will only be effective to protect work done in the 20 days before sending notice, as well as the work done afterward. Note that parties hired directly by the property owner usually don't have to send notice. Rather, they'll only need to give preliminary notice if there's a lender on the job. Another big requirement is the deadline to lien. In California, mechanics lien claimants must generally file their lien claim within 90 days of the completion of the project. Granted, this timeframe may be shortened if a Notice of Completion or Cessation was filed on the job. More on that deadline here: When is the deadline to file a California Mechanics Lien? For further discussion on California's lien requirements, this page should be very helpful: California Mechanics Lien Guide and FAQs

Options for recovering payment before a lien becomes necessary

Of course, keep in mind that a mechanics lien is generally the nuclear option. And, there are often a few different recovery tools that can help speed up payment before a lien filing becomes necessary.

Invoice reminders

An invoice reminder acts as a simple nudge in the right direction. It reminds a customer of the debt that's owed - and sometimes that's all that's needed to get paid. More on that here: How Invoice Reminders Help Contractors Get Paid Faster.

Demand letters

A payment demand letter escalates things a bit. Demand letters will typically include specific legal threats and are intended to show recipients that the sender is serious about getting paid. Nobody likes dealing with liens or legal claims, so the mere threat of future action may be enough to get paid.

Notice of Intent to Lien

Taking things a step further with a Notice of Intent to Lien may be necessary for some situations. The document acts as a warning shot - it informs recipients that if payment isn't made and made soon, then a lien claim will be filed against the project. Considering the drastic nature of mechanics lien claims, sending a Notice of Intent to Lien to your customer and the property owner can work to put additional pressure on the issue in order to force payment. Further discussion here: What Is a Notice of Intent to Lien and Should You Send One?

Alternative recovery options outside of the mechanics lien process

Of course, there are always recovery methods outside of the mechanics lien process, too, if a lien claim isn't available or isn't an enticing option. Options like pursuing a breach of contract claim, prompt payment claim, or some other legal claim could always be on the table. For more discussion on alternatives: Can’t File a Lien? Here Are Some Other Options For Recovery.

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