How can I avoid a mechanics lien?

7 months ago

I am a homeowner in CA whose contractor has not paid his material supplier. I do not want a mechanics lien on our house. We paid the contractor for the supplies as he said he needed that money to pay for them up front. The invoice from the supply company indicated payment was due COD. Since everything was delivered and left assumed this was paid and the supplies were used. The material supplier left a note 3 weeks later at our house for the contractor indicating a mechanics lien was possible. When I called the material supplier they said our contractor owed them for three additional jobs. It seems wrong for them to keep delivering supplies COD, when the contractor has not paid them for past jobs and then threaten the homeowner who has already paid the contractor. Do you offer advice on this?

Senior Legal Associate Levelset
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First, note that a subcontractor or supplier will still typically be entitled to file a mechanics lien, even where the project’s prime contractor has been paid in full. However, there are some protections built-in for a homeowner.

Let’s look at some considerations that might be useful here. But, before diving in, here’s a resource that should be valuable to you: I Just Received a Notice of Intent to Lien – What Should I Do Now?

If a California contractor has been paid in full, that contractor must defend the owner against lien claims

A contractor must defend an owner against lien enforcement actions when that contractor’s subs or suppliers file a mechanics lien against the owner’s property – as set out by § 8470 of the California Civil Code. So, a contractor isn’t off the hook simply because it’s the owner’s property – it’s still their responsibility to resolve the claim.

Mechanics liens can’t be filed on one job for debts owed on another

Keep in mind that a mechanics lien is a debt that ties directly to an owner’s property as a result of the work or materials being provided to that particular property. So, if there’s a debt on some other, unrelated job – that claimant can’t just file a lien for that debt on a different owner’s land.

Subs and suppliers can only file California mechanics liens if they first sent preliminary notice

While subs and suppliers may be entitled to lien, they’ll only be able to file a valid and enforceable lien claim if they sent preliminary notice to the owner and the GC. And, if a sub or supplier fails to send preliminary notice wasn’t (or sends it too late), then that party’s lien claim wouldn’t be valid and enforceable. More on those preliminary notice requirements here: California Preliminary Notice Guide and FAQs.

If a lien is filed, an owner can quickly discharge that lien by bonding it off

If, unfortunately, a lien claim does get filed – an owner will be able to bond off the filed mechanics lien. This will discharge the lien from the property, but it won’t make the claim disappear altogether. Rather, instead of the claim being against the home – the claim would have to be enforced against the bond.

It’s hard to fend off a California mechanics lien claim before it’s actually filed

With all of the above being said, note that it’s tough for a property owner to prohibit a lien from actually being filed in the first place. While there are a number of avenues to fight a lien claim, the options are all pretty reactive.

Still, informing a lien claimant why their lien claim would be improper and threatening to pursue legal action against them if the lien is filed could be a good first step when trying to avoid a lien claim. And, putting pressure on a contractor to make payment can be helpful too – and, legal threats against the contractor should help in that regard.

Finally, note that the help of a construction attorney could help in determining how best to ward off a potential lien claim. If you’d like to reach out to a California construction law expert, there are some available on the Expert Center, here: Construction Payment Experts in California.

Disclaimer: The information presented here is not legal advice and should not be construed as such. Rather, this content is provided for informational purposes. Do not act on this information as if it is advice. Further, this post does not create any attorney-client relationship. If you do need legal advice, seek the help of a local attorney.
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