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How can I collect payment without filing a lien?

CaliforniaBankruptcyLicensesLien DeadlinesMechanics LienStop Notice
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Anonymous contractor
Oct 21, 2020

I’m a contractor working on a large commercial project inside a Mall. I finished my work on the job last month but haven’t gotten paid and my customer isn’t returning my calls. I sent the preliminary notice late and in our contract our client signed an arbitration of disputes form. How can I collect payment if I cannot file a lien?

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Anonymous contractor
Oct 21, 2020

The arbitration agreement does not prevent you from recording a lien. You would just need to file a lawsuit to foreclose the lien within 90 days of recording and then stay the action pending arbitration.

Failure to serve preliminary notice precludes you from recording a lien for amounts earned more than 20 days before preliminary notice was served. But you could at least record a lien and/or serve stop payment notice for the amounts earned within 20 days of your preliminary notice and after. 

If you have evidence that the project owner had actual knowledge of your work you may also have an estoppel argument to overcome the delayed preliminary notice. This may give you grounds to record a lien for the full amount you are owed. 

Beyond this, your best option may be proceeding with the mediation and/or arbitrations provisions of the contract. Most of these provisions also have a prevailing party clause meaning that – if this provision in in your contract – although you will need to split the cost of the arbitrator, if you prevail you should be entitled to recover your attorney's fees and costs. And as long as your customer is solvent, they will have to pay any judgment you obtain as the CSLB will under most circumstances suspend their license if they don't. They risk is always that they could go bankrupt wiping out your recovery. 

If you have further questions, feel free to email me at ryan@huntortmann.com to set up a free consultation.  

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