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Lien Release California

We sent a lien release to a title company in California under a Letter Agreement with the liened property owner. The title company was directed by the property owner's legal counsel to file the release without paying us the required sum and violated the Letter Agreement. What is our recourse? Should we file a new lien? Or is there a way to invalidate the lien release since it was filed without consideration?

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May 11, 2020

If an owner has reneged on a settlement agreement, there are a number of different potential recovery options. And, having a California construction attorney on your side will help to sort out what options make the most sense for you. Let's look at a few potential options.

What to do when an owner reneges on a settlement

For one, if the deadline to file a lien hasn't passed, then a new lien claim could be filed. There could be some turbulence if the release stated that it releases any and all lien claims on the property. But, it'd be hard for an owner to argue with a straight face that a lien shouldn't be allowed when they've fraudulently coerced the claimant into releasing their lien. Even if the deadline to file a mechanics lien has passed, other recovery options would still be on the table. Breach of contract claims, prompt payment claims, etc. should still be on the table. What's more, claims of fraud and deceptive business practices could be on the table as well. And, sending a payment demand letter threatening these claims against the owner, title company, and others involved in the project could force them to do the right thing and pay what's owed. Additionally, keep in mind that making a complaint with the attorney general's office (or simply threatening to) is absolutely an option if an owner or business has been acting inappropriately. And, simpler complaints like leaving reviews online with sites like the Better Business Bureau, Google, Facebook, etc. could be effective pressure, too. Plus, if the attorney acted unethically, reporting them to the California Bar Association (or to whatever association they belong to) as well as the attorney general's office could be effective, too.

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