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Is the Contractor Liable for lost time/funds if he quits the project without legal reason/excuse?

CaliforniaLien DeadlinesMechanics LienRight to LienStop Notice

Our custom home was to be completed October 1, 2019; the contractor quit in January. He never filed a proper "Stop Work" notice--only stated so in an email. No notice was ever filed on the property, given to us as owners or served on the bank. He simply sent an email stating "this serves as my official stop work notice". Is he liable for time lost and expenses to us as the owner now that he's tied up our property with an untimely filed lien? (Quit January 8 and filed his Mechanics Lien May 1, 2020.) Advise appreciated. And there's nothing in his contract that states 'time is of the essence'.

1 reply

May 19, 2020
California mechanics lien claims are only available to the extent that the claimant has performed work and gone unpaid. So, a lien claimant can't just file a lien claim for work they haven't actually done - that could result in a fraudulent lien. And, if an improper lien was filed, that could certainly result in an owner being awarded damages. As for timeframes - mechanics lien deadlines can really linger if a project is abandoned and certain documents aren't filed, as I'll discuss below. And, if nothing else, it's possible that the lien filing is timely. Finally, keep in mind that mechanics lien disputes are serious business. If a mechanics lien claim has been filed against your property, it'd be wise to consult a local California construction attorney. They'll be able to assist with determining the validity of the lien, and they can also help determine what claims you have available against your contractor. Certainly, if a contractor improperly abandoned the job and breached their contract, they could be liable. This article will be useful, too: A Mechanics Lien Was Filed on My Property – What Do I Do Now?

California's mechanics lien deadline

California contractors who were hired directly by the property owner must file their mechanics lien within 90 days of completion of the project. But, if a Notice of Completion or Cessation is filed, the lien deadline shrinks to 60 days after that filing. Even if a Notice of Completion or Cessation wasn't filed - nailing down when, exactly, completion occurs can be hard when the contractor walked off the job. Generally, completion will occur when one of the following events takes place: - Actual completion - Occupation or use by the owner, accompanies by a cessation of labor - Stoppage of labor for a continues 60 days - Recordation of a Notice of Cessation after a continuous 30-day work stoppage. So, if no Notice of Completion or Notice of Cessation occurred, then it's possible that the lien deadline could extend as much as 150 days after work stopped (60 days before completion occurs + 90 days after).
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