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I am in the state of California can i provide service to the buyer while on escrow ?

I had provided service to a mortgage center(bank) on a property all authorized work by the bank was paid . The buyer contacted me to provide additional service , since he was still waiting to close escrow and did not want to waste time he asked if i could start the work and as soon as he closed the escrow he would pay. i did not obtain a signature on a new work order from him because he refuse, saying he was not legally the new owner until escrow closes and declare him owner , then he be able to make payments for repairs on that property . At this time the buyer and the agent do not respond to my calls, emails , etc. The time frame is almost closed just waiting on them to respond the work was done back in May 2018 . Please advise what can be done at this point

1 reply

Jul 18, 2018

That's an interesting situation. In order to give rise to lien rights, work must be "authorized" as provided by the California Civil Code. Under § 8404, work is considered "authorized" when: "a) It is provided at the request of or agreed to by the owner. (b) It is provided or authorized by a direct contractor, subcontractor, architect, project manager, or other person having charge of all or part of the work of improvement or site improvement." In a situation where work was not set out by the owner of the property, but by some prospective owner, there's a very real possibility that the work is not considered "authorized" and therefore does not give rise to lien rights. In the event that the party who did order the work becomes the owner of the property prior to the deadline for filing the lien, conceivable a claimant might be able to file a lien - but even then, the validity of the filed lien would be questionable. Note, though, that even in a situation where lien rights might not exist for work performed, sending a Notice of Intent to Lien could be helpful. A mechanics lien is a drastic remedy, and no one wants to deal with a lien filing - especially when closing on a property. Thus, providing a Notice of Intent to Lien to the party who has failed to make payment can go a long way to compel payment. Further, sending a demand letter with specific threats of legal action can also be effective - especially if sent via an attorney. Finally, if the party who "authorized" work does take possession of the property, but does so after the deadline to file a lien, there may be a few options for recovery - such as a breach of contract claim, an unjust enrichment claim, or potentially a claim in small claims court.

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