Home>Levelset Community>Legal Help>If a subcontractor does not pay a material supplier who has not filed a preliminary notice with the owner of the property, does the material supplier have any means to get money from the owner of the property where the material has been installed?

If a subcontractor does not pay a material supplier who has not filed a preliminary notice with the owner of the property, does the material supplier have any means to get money from the owner of the property where the material has been installed?

I am the sub who is behind paying for his material because of disputes on another project. A rep from the supplier came to the job and threatened to lien the property. I tried to get an installment agreement to pay off the debt. The monthly I could afford was not enough so they demanded payment in full or else they would lien the property and go after my license. The general contractor freaked and paid them 5,000 and I was supposed to match that to keep the supplier from releasing the hounds. Well I somehow scraped that up but missed my mortgage payment which disqualified me from getting an equity loan which would have paid them off. I had already put time and money into making repairs on my house to qualify. Now the general wants to pay them again and deduct that from money that he owes me. I do not believe that the material supplier filed a preliminary notice, hence my question. Thank you.

9 replies

Feb 5, 2018

I'm sorry to hear about that - I can't imagine how frustrating this must be, especially considering all of the efforts made to resolve the payment issues. In California, a material supplier must provide preliminary notice in order to file a mechanics lien on a given project. The failure to send notice to all required parties, and in compliance with the form and time requirements set forth is fatal to a lien in California. Generally speaking, when a mechanics lien is not available, other recourse for nonpayment (such as litigation or an action in small claims court) will not involve a property owner - the dispute will likely remain between the parties under contract (or at least those providing labor and/or material to the project).

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Feb 5, 2018

In California a material supplier to a subcontractor is required to provide a preliminary notice in order to later file a valid and enforceable mechanics lien. In order to protect the entire amount of materials supplied, the notice must be provided within 20 days of first furnishing the materials. If that deadline is missed, it's not necessarily fatal to a subsequent lien claim, but a late notice only protects amounts furnished within the 20 days preceding the date the notice was given. To be effective, the notice must be given to the property owner, the direct contractor, and the construction lender (if there is one).

While a lien may not be ultimately effective if the required notice is not given (and for a whole host of other reasons) that doesn't necessarily mean that an (improper) lien could not be filed. County recorders rarely work as gatekeepers to prohibit the filing of liens that may be invalid. Accordingly, even if the lien is not ultimately valid, it may be filed and necessitate a fight about it. Although, if a lien is filed improperly, the claimant may be liable for damages.

Note, however, that whether or not a lien is filed (or proper), the underlying obligation to pay remains. But in that situation the ability of the supplier to recover would be limited to recovery through the sub with whom they contracted.

I'm sorry about the situation you have found yourself in - and I'm hopeful that it can be worked through without too much further difficulty. As you know, cash-flow is crucial and issues on other projects can ripple through your whole project portfolio. Being proactive about providing visibility regarding your suppliers, and making sure your own lien rights are protected can sometimes help streamline the payment process so you don't find yourself in this situation again.

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Oct 2, 2019

Hello, We are a Singaporean Small Medium Enterprise (SME) who has customer in San Diego owing us USD90,000 for close to 6 months. We need recover our money urgently, but they are ignoring our emails, phone calls, etc. How do I proceed to prosecute them for the money we to us? Can you help me?

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Jan 29, 2020

Hello, I have a contractor worked on my concrete driveway. He did not pay for the concrete so the concrete supplier filed a lien on my property. The supplier said this is the second time that happened from the same contractor. I already paid the contractor for the work. Please advise. Thanks.

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Dec 19, 2020

I did not sign a contract with the roofer on my house and they failed to pull the any permits. Then I find out they had a suspended license for workers comp., so another company pull the permit and didn't pay the permit either. So now I'm told I have to pay for all the materials to remove a lien on my house. I haven't paid either contractor and they both agreed to waive bill as they got caught for no license. So can this material still lien my house if I had no sign contract and the material was sold to unlicensed contractor?

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Jun 28, 2021

Hello, did you get an answer, I live in LA and had the same experience. How did you go about fixing the problem here's my # you can text or call. 760-524-6001 thanks in advance

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Aug 6, 2021

I’m in Cannock! Can yow elp?

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Aug 6, 2021

Sounds to me like your ripping somebody off?? GG

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Aug 3, 2022

I'm a lawyer and CFO of a construction company in California. I can't give you legal advice, but in general, it's correct that in California a materials supplier has no contract rights against the project owner unless a preliminary notice has been served. However, the supplier could bring a breach of contract lawsuit against its customer and almost immediately obtain a prejudgment attachment of the customer's assets, which include its customer's right to be paid by the owner (or if the customer is a subcontractor, by the GC). In my experience - and I have been a lawyer for 45 years- an attachment order is even better than a mechanics lien. The problem with mechanic's liens is that if the reason for nonpayment is that the owner has run out of money or has a problem with its lender, chances are that the lender has a prior lien on the project, and the contractors will be foreclosed out by the lender. Also, an attachment order can attach to the customer's right to be paid for its work on other projects.

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