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Preventing Fraudulent Lien Filing / Slander of Title

An unlicensed contractor in California was paid by a private homeowner to do concrete work for approximately $25,000. They started work on 12/19/2017 and we fired him for horrible work quality about three weeks later on or about January 10, 2018. We retained another concrete company who repaired the bad work and then poured and finished the job completely on Jan 19, 2018. I was never served a preliminary notice but on 12/26, 2018 (over 300 days after the project was completed) I received a Claim of Mechanics Lien for $50,000. We paid this guy a total of over $18,000 and ended up paying another $10,000 or so to a licensed concrete professional to finish this work. The claim for $50,000 has absolutely no basis whatsoever, the guy was unlicensed, we never received preliminary notice and the Claim of Mechanics Lien was sent to me over 300 days after the work was complete. Finally, I know for a fact that the lien has not yet been filed because we just refinanced the home and the title was perfectly clean as of a week ago. Can I prevent this guy from filing the Lien by contacting the Santa Barbara County recorders office and give them these facts? This is a shake down of epic proportions: the guy even listed all kinds of work that he NEVER did and was never contracted to do; he literally just made stuff up and put it onto the Lien. What can we do to get ahead of this thing and stop him from filing this fraudulent lien? Thank you SO much!!!

1 reply

Dec 31, 2018

I'm very sorry to hear that - it's incredibly frustrating when bad actors abuse legal processes like the situation you described above. As you may know, California is incredibly strict when it comes to licensure rules. Where licensure is required, unlicensed California contractors cannot file a valid and enforceable mechanics lien. In fact, when a contractor fails to carry the appropriate licensure, that contractor is unable to use any legal tools to attempt to recover payment. What's more, a party who has hired an unlicensed contractor may even be entitled to all monies that have been paid to the contractor. Regarding notice - where a contractor is hired directly by the property owner, a California claimant need only provide notice to the construction lender, if one is present on the project. But, if no lender is present, a direct contractor does not need to provide preliminary notice in order to preserve the right to lien. Granted, if hired by someone other than the owner, a claimant must send notice in order to preserve their lien rights. Finally, regarding the timeframe involved, a California direct contractor must record their Claim of Lien after completion of the direct contract, and before the earlier of either: (1) 90 days after completion of the work ; or (2) 60 days after the owner records a Notice of Completion or Cessation. Still, regardless of the deadlines, notices, and other requirements - a claimant will only have the right to lien for amounts that are owed and unpaid. If a claimant files a lien exceeding those amounts, and/or if a claimant includes work not performed, the lien could be invalid and unenforceable - and potentially even fraudulent. With all that in mind - many property owners find that threatening a potential lien claimant with legal action - based on licensing rules, disputes over workmanship, fraud, or any number of other potential causes of action can help to fend off a would-be fraudulent lien claimant. Sending such a threat through an attorney could provide extra "umph". For more background on the rules surrounding CA mechanics lien findings, this resource should be helpful: California Lien & Notice FAQs. For more background on responding to the threat of lien, this article might be of use: I Just Received a Notice of Intent to Lien – What Should I Do Now? As far as preventing the recording of a lien by contacting the county recorder's office - it might be worth a try, but generally, the county recorder's office has neither the authority nor the bandwidth to investigate each claim filed. Thus, preventing the filing before it occurs may be the best bet, if possible. Finally, if a lien claim does get filed, this article should be helpful: A Mechanics Lien Was Filed on My Property – What Do I Do Now?

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