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Lien removal and timing

a laborer files a mechanic's lien on our property but they did shoddy work. we documented everything and are not paying it off, have a very strong case to sue for damages and incompetencies. Their attorney contacted us and is willing to remove the lien if we sign a contract that we won't sue them or report them to any government agencies. we live in CA and the lien expires today. should we sign it or let it expire and then submit a demand to remove? any advantage to either?

1 reply

Jul 23, 2019

What an interesting scenario! As you are probably aware, mechanics liens in California must be enforced 90 days after the recording of the claim, or it will expire. Presumably, today is that day. Your question states that the laborer "performed shoddy work" and you have a "strong case to sue for damages and incompetencies." That's great news. Proper documentation is crucial to protecting your interests when construction is involved. Assuming all this is true, let's take a look at your options.

Option 1: Signing the contract. Doing so means that the laborer will voluntarily remove the lien claim. However, this also means waiving the right of action for damages caused by the defective work. The end result, the lien is removed, and you are left with faulty work.

Option 2.1: Let the lien expire. If confident enough in the evidence that you've collected, you can let the clock run out on the lien claim. On the 90th day, with no action instituted, the lien will automatically become unenforceable. A written demand can then be sent to the claimant demanding the removal of the lien claim off the county records. The end result, the lien is removed, and you are left with the right to legal action for any damages that may result from the defective work performed.

Option 2.2: The laborer enforces the claim. If the claimant does decide to enforce the lien claim, it is a costly and time-consuming process for both parties. The court may determine that the work was defective, but the laborer is still entitled to recover the reasonable value of the non-defective work performed. Depending on the amount in controversy, this may not be worthwhile to pursue.

At the end of the day, this is a cost-benefit analysis for the lien claimant. The ultimate question is if the disputed amount is enough to outweigh the costs and time spent for litigation.

For more information check out: Is Foreclosure With a Mechanics Lien Worth It?

Hope this helps. Good luck!

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