I m a subcontractor and have not received payment for a project the Grneral contractor refuses to pay i file a preliminary notice and a mechanical lein they are denying payment what should my next step be
Jul 1, 2019
That's a good question, and I'm sorry to hear you've been going unpaid on this job. Before going further, though, I should note that I'm not able to provide you advice on how you should proceed in your particular situation. However, I can provide some information that should be helpful in making your own determinations. With that in mind, let's look at some options for payment recovery.
When a mechanics lien has been filed but remains unpaid, one option might be to send a document like a Notice of Intent to Foreclose. Because a mechanics lien enforcement action is such a drastic remedy, most owners and contractors can't afford to ignore a warning that the lien will be foreclosed upon if payment isn't made. Essentially, a Notice of Intent to Foreclose is an official letter informing both the owner and the GC that the lien claimant is not afraid to proceed with a lawsuit if payment remains unpaid. And, it can be effective regardless of whether a claimant actually intends to proceed with suit. For more on that option, this is a helpful article: Construction Payment: What Is a Notice of Intent to Foreclose?.
While it's certainly not the way a lien claimant wants their claim to go, proceeding with a lawsuit to enforce the filed lien is always an option (though, the option described above can often help to avoid going through with a suit). By enforcing a lien claim, the lien claimant forces the property owner and contractor into action. If they fail to make payment or to defend against the lien claim, it could ultimately result in the loss of the property. For more information on that option, this is a great resource: What Is “Enforcing” a Mechanics Lien?
And finally - keep in mind that there is a strict deadline for enforcing a mechanics lien. In California, a filed mechanics lien must be foreclosed upon within 90 days of when the lien was filed. Otherwise, the lien claim will expire and the claimant will have to turn to other options to pursue their payment claim. This timeframe can be extended if both the claimant and the owner agree to extend the time period and try and resolve the dispute out of court - but that takes cooperation from both sides. You can learn more about extending the deadline for a California mechanics lien claim here: Understanding Notice of Credit and Lien Extensions in California.
But, for advice on your best recovery options, as well as which avenues for recovery make the most sense in your circumstances - it would be wise to consult a local construction attorney before deciding how to proceed. They'll be able to review your situation and any relevant documentation and help plan out next steps for recovery.