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Is it possible to file a lien without a contract?

CaliforniaRight to Lien

We did some plumbing work and appliance removal for a project that our main realtor group told us was ours, so we wrote up a contract and sent it off to the group and the owner. They wanted to get the ball rolling immediately so that they could flip the property and put it on the market as soon as possible. We have a good relationship with the group, so we did some work without the contract being signed, and it turned out that the owner decided to go with another contracting company to do the renovation. We invoiced him for the work that was done, but he only wants to pay a portion of it. My boss wants to put a lien on the property until we are paid in full for our work, but I’m wondering if it is even possible without ever having a signed contract in hand? Hope to hear back from you soon! Thank you very much for your time.

1 reply

Aug 9, 2018
That's a tough situation. First, it's worth noting that whether or not a lien could be filed or would be valid are separate questions - most county recorders offices have neither the bandwidth nor the authority to scrutinize each claim that is submitted for filing. Of course, a claimant should never file a fraudulent mechanics lien. But it's also worth noting that not all lien filings that have issues will automatically be fraudulent. We explain that idea more in depth here: Frivolous Mechanics Liens: Intentionally Fraudulent vs. Honest Mistakes.

Anyway, in California, a contract does not necessarily need to be in writing in order to give rise to mechanics lien rights - but some agreement to perform work must be in place (such as an oral agreement to perform work). Further, only a party that provides authorized work may will be entitled to a lien claim. Thus, even if a written contract was not executed, if work was authorized, it may give rise to lien rights. Based on § 8404 of the California Civil Code, "Work is authorized for a work of improvement or for a site improvement in any of the following circumstances: (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." So, if a claimant has provided authorized work for an improvement, regardless of whether a written contract was executed, that work may give rise to lien rights.

As for the amount of a potential lien claim - the California Civil Code is pretty clear on that too. Under § 8430 of the California Civil Code, "The lien is a direct lien for the lesser of the following amounts: (1) The reasonable value of the work provided by the claimant. (2) The price agreed to by the claimant and the person that contracted for the work." Note though that when work exceeds the scope of work set out in the contract or agreement to perform work, that work beyond the contemplated scope will not be lienable.

It's also worth noting that filing a mechanics lien is not the only next step available to enforce payment. A claimant can send a Notice of Intent to Lien to try and compel payment without actually filing a mechanics lien - and a Notice of Intent to Lien can be effective at both speeding up payment and keeping relationships intact. The Notice of Intent essentially acts like a lien warning - it states that, unless payment is made, a lien will be filed. Often, the mere threat of a lien is enough to get settlement talks moving in the right direction.
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