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Home>Levelset Community>Legal Help>I had set a budget verbally with contracor, asked for estimate. Never recieved anything until end bill and it was 300% higher then my budget. How do i preempt a mechanics lien?

I had set a budget verbally with contracor, asked for estimate. Never recieved anything until end bill and it was 300% higher then my budget. How do i preempt a mechanics lien?

CaliforniaMechanics Lien

House renovation

1 reply

May 7, 2019
That's a good question. First, let's talk about preventing a lien, then, we'll look at potential issues a lien claimant might face for CA residential construction projects. Procedurally, it's hard to fend off a lien claim before it's even filed. California property owners can secure a payment bond, pursuant to § 8600-8614 of the California Civil Code, that would prevent a lien attaching to their property (a claim would attach to the bond instead). However, surety bonds can be particularly expensive - so that's not always a practical option. Often, the best way to protect against a lien is to go on the offensive - especially when there are glaring issues that would present the filing of a valid and enforceable mechanics lien. And, in California, there are a number of factors that could affect the validity of a prospective lien filing, especially for residential construction projects. For one, California home improvement contracts must be in writing, and they must contain a litany of mandatory language. In fact, even if a CA home improvement contract only included the language specifically required, the contract would still span several pages. Further, the contract and price payment schedule must be set out in the contract to be valid. If a California home improvement contract does not align with California's requirements, the agreement may be deemed invalid, and the contractor might not be entitled to recover payment at all. Further, even in a situation where lien rights would arise, a contractor can't just inflate their price (and lien claim) at their whim. California mechanics lien claims are limited to the lesser of (1) the price agreed to for the work, or (2) the value of work provided. So, if there's an agreed price - a contractor cannot exceed that price on their lien. Further, if there is no price that was agreed to, a contractor's lien is still limited to the value of their work. So, if the contractor files a lien that's above and beyond these amounts, their lien claim will likely be invalid and unenforceable, plus they could even become liable for damages if the lien is deemed fraudulent. All of this is to say that when faced with a contractor who does not play by the rules, property owners can often fight off lien claims by asserting legal position of their own. Everyone deserves to be paid what they've earned, but no one should be able to bully their customer into paying more than that. By reminding a contractor of the rules that apply to them, and by contesting the ultimate viability of a future lien claim, it might be possible to reel in the conversation and try to find some reasonable middle ground. Ultimately, though, mechanics liens are a serious remedy - and when an owner receives a threat of lien, it might be time to start thinking about consulting a local construction or real estate attorney for guidance. They'll be able to take a deeper look into the circumstances and documentation and advise on how best to proceed. For more background information on California home improvement contract requirements, this resource will be valuable: California Home Improvement Contracts Require Specific Language.
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