Home>Levelset Community>Legal Help>Hello, I did rent a shop as a individual and as a general contractor did all the tenant improvement myself with a help of other contractors such as Electrician, AC engineer, Plumber and some labor workers, in all i spent about $60,000 on this project, After completion i was informed at this location has a legal use which can not be used for the business i had in mind, Landlord accept the responsibility and willing to cancel the long term lease but when i asked for the money i spent for tenant improvement he refused to pay, now i am considering to use my right as a general contractor and the person who did all the work to file a mechanic's lien against the landlord and his property, am i right to do so?

Hello, I did rent a shop as a individual and as a general contractor did all the tenant improvement myself with a help of other contractors such as Electrician, AC engineer, Plumber and some labor workers, in all i spent about $60,000 on this project, After completion i was informed at this location has a legal use which can not be used for the business i had in mind, Landlord accept the responsibility and willing to cancel the long term lease but when i asked for the money i spent for tenant improvement he refused to pay, now i am considering to use my right as a general contractor and the person who did all the work to file a mechanic's lien against the landlord and his property, am i right to do so?

1 reply

Sep 16, 2019

I'm not sure that there's any specific provision of the California Civil Code that would prevent a tenant from filing a mechanics lien against their owner when the tenant, themselves, has improved the underlying property. But, as I'll explore a little below, that is certainly an abnormal situation which the California mechanics lien laws don't really contemplate or anticipate. And, since there are a number of potential variables here, it's hard to say whether a mechanics lien would ultimately be successful. Under § 8442 of the California Civil Code, an owner may be responsible for their tenants' improvements if the work was performed with the knowledge of the owner. And, California property owners are able to prevent the ability for mechanics liens based on tenant improvements by sending a Notice of Nonresponsibility under § 8444 of the California Civil Code. So, unless a Notice of Nonresponsibility was given, and owner's property will typically be subject to lien. Still, for lien rights to arise, the work must be authorized by either the owner or by another person having charge of all or part of the property. So, if the owner authorized the work that was done, then lien rights would generally arise. But, if the owner did not authorize the work, then I'm not sure a GC would be entitled to authorize their own work, thus giving rise to mechanics lien rights. But, at the same time, this is not a situation specifically contemplated by the California mechanics lien statute. So, conceivably, a mechanics lien might be available if the owner was aware of and approving of the work that was being done at the property. Ultimately, whether or not a mechanics lien would be appropriate would come down to the decision of the court if the lien is challenged or enforced. And, it's impossible to know how a given court might rule, especially with a unique situation. As a final note, keep in mind that the mere threat of a mechanics lien - via a document such as a Notice of Intent to Lien - might be enough to compel payment in many situations. You can learn more about that here: What Is a Notice of Intent to Lien and Should You Send One? For more information on California mechanics liens: California Mechanics Lien Guide and FAQs.

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