I’m an Architect who hasn’t been “paid in full” for commercial tenant improvement drawings provided to my Client who has leased a retail space in a shopping Mall, can I file a lien on her business and her local bank account?

5 months ago

My Client lives in Italy, but has a local business address and local bank account
She has leased a 2100 sf space in a major shopping mall to establish a retail shoe business
She hired me to create drawings for the remodeling and improvement of an existing space at the Mall
I completed all the drawings for my Client who than used them to get bids from Contractors
She has paid me only 1/3 of my fee, prior to my completing the Contract Documents
After several weeks of waiting for payment on invoices sent to her, and which she agreed to pay and stated several times that she was sending payment, she has since stopped communicating with me
I sent her a “Breach of Contract” notice along with several invoices in which I demanded immediate payment for work completed to date via email She has refused to communicate with me via email, phone or texting I have a signed agreement with her that she reviewed and signed in Italy after a trip here to Los Angeles to sign her lease with the Landlord of the Shopping Center

I want to recover my Fees, so do I have a right to Lien her business, business assets and/or her local ‘bank account’? The amount that she owes me is $10,500 + interest of several months @ 1.5% every 15 days past due

Chief Legal Officer Levelset

There are many different factors surrounding what type of work may give rise to mechanics lien rights, what property interests to which the lien may attach, and the rules and requirements associated with maintaining any potential rights.

The first question is to what property a lien ay attach. Mechanics liens attach to the property being improved itself, not the personal property of the non-paying party (like bank accounts, or other property). In order to obtain a lien or other security interest in property other than the improved property, there would need to be some other mechanism giving rise to that type of right, either a judgment or something like a UCC financing statement.

In California, property improvements commissioned by a tenant can sometimes give a claimant rights against the property itself. If the actual property owner knew of the work, the work is deemed to have been completed at the insistence of the property owner such that the property itself can be encumbered by a mechanics lien. If the owner doesn’t actually know of the improvement, or if the owner files a notice of non-responsibility, any mechanics lien against the project may only attach to the leasehold interest of the tenant contracting for the work.

California also allows design professionals (including architects) the ability to file either a “design professionals lien” or a regular mechanics lien, depending on the circumstances. A design professional’s lien may be filed if the actual construction of the work of improvement has not yet begun. The requirements for such a lien are set forth by CA Code §8300-8318, and include:

(a) The work of improvement for which the design professional provided services has not commenced.
(b) The landowner defaults in a payment required under the contract or refuses to pay the demand of the design professional made under the contract.
(c) Not less than 10 days before recording a claim of lien, the design professional gives the landowner notice making a demand for payment, and stating that a default has occurred under the contract and the amount of the default.
(d) The design professional records a claim of lien (in sufficient form).

Note, however, that “[a] design professional may not record a claim of lien, and a lien may not be created, under this chapter unless a building permit or other governmental approval in furtherance of the work of improvement has been obtained in connection with or utilizing the services provided by the design professional.”

Otherwise, a claimant may make a general mechanics lien claim (against either the property itself or the leasehold interest, depending on the knowledge of the property owner) by following the same requirements as generally set forth for mechanics liens in California.

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