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Liening Property management Company

We are a flooring store that has a property management company that is very slow to pay and have heard rumors of other vendors of theirs struggling to get paid. We sell and install flooring in three of their apartment complexes. After invoicing we allow appx. 30 days to pay. This particular company has some as old as 100 days and many at 50-80 days old. We have done work as recently as 14 days ago. We would like to explore what our options are.

1 reply

Oct 19, 2018

To the extent that a mechanics lien is allowed - they can be powerful tools to ensure payment. Each state has specific requirements related to who can claim a lien, what type of work qualifies for protection, and the associated rules and requirements that must be followed in order to record a valid and enforceable lien.

In California, parties providing labor or materials for the improvement of property are entitled to mechanics lien protection. However, California has strict licensing requirements. Not only can an unlicensed party who performs work for which a license is required not able to file a mechanics lien, they are also not allowed to recover through suit, and may be forced to pay back the money received for work on a project.

Other than the licensing requirements, California has notice and deadline requirements, as well. All parties other than wage laborers must provide a preliminary notice in order to later claim a valid lien. Parties who contract directly with the property owner, must only provide a preliminary notice to the construction lender associated with a project (if any). When required, in order to fully protect the labor or materials furnished, the preliminary notice must be sent within 20 days of the claimant first furnishing labor or materials to the project. If it is sent later, it is effective to protect the value of the labor or materials furnished from the date 20 days prior to the date on which the notice was provided.

After the preliminary notice, a lien in California must be filed within 90 days from the completion of the work as a whole. That period may be shortened if the owner files a notice of completion / cessation. This deadline is applicable;e to each particular project on which a party works - but is not related to their own invoicing or pay-apps, but rather the final completion of the entire work of improvement.

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