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Fire Extinguisher Subcontractor for construction company that has not paid me in 6 months

CaliforniaBond ClaimsRecovery OptionsRight to LienStop Notice

I supplied a contractor with $25,000 worth of fire extingusihers, cabinets and AED machines for a San Diego State Dorm Project and I have not been paid in full. I get no communication emails and phone calls sent to them. Can I file a lein?

1 reply

Oct 25, 2019
Mechanics liens will generally not be available for work that's performed on publicly owned property. Instead, a public agency will typically require their prime contractor to provide a payment bond for the project, and any claims for payment would be made against the bond rather than against the property, itself. Here's a resource that may be helpful: What’s the Difference Between a Lien Claim and a Bond Claim?

The basics on California bond claims

When property is owned by a public entity, that property generally cannot be liened by a private individual or business. But, because the loss of the ability to file a mechanics lien leaves subs and suppliers without much recourse for nonpayment, payment bonds are typically required on these projects. I'll provide a lot more information below, but for some background on California bond claims and stop notices: California Bond Claim Guide and FAQs.

What is a payment bond?

You can think of a payment bond sort of like an insurance policy for the project. If a sub or supplier isn't paid for their work, they're allowed to make a claim against that bond (by sending a claim to the surety company who provided the bond to the contractor). And, when valid bond claim is made, the surety will have to pay the sub or supplier who filed a claim on the bond - not unlike when an owner must pay a mechanics lien claimant. More on payment bonds here: How Does the Payment [Surety] Bond Claim Process Work? Requirements and Mistakes to Avoid.

How to make a payment bond claim

Levelset actually has a great resource on this topic, so I won't go too far into it here: How to File a California Payment Bond Claim. But, generally: Making a bond claim tends to be simpler than filing a mechanics lien. Rather than filing with a public office and paying to have a lien recorded, bond claims are mailed directly to the GC and their surety company.

California stop notices are another great payment recovery tool

California is also home to another payment recovery tool - the stop payment notice (also known as a "stop notice"). Essentially, when a stop notice claim is made with a public agency, the project funds freeze, and a contractor is no longer able to obtain payment from the public entity who hired them until the dispute is resolved. When the money stops flowing, work stops soon thereafter - so a stop payment notice can go a long way toward recovering payment, too. Further, stop notices become even more valuable for projects where a payment bond might not have been required. Here's a resource that can help to frame how stop notices operate: The Differences Between A Stop Notice and a Mechanics Lien.
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