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Supplier sent intent to lien on California homeowner property because contractor didn’t pay bill. More to this problem

Hi We are the homeowner. Our contractor is not in good standings. License expired, law suits, unlicensed subcontractors, faulty work etc. We had a small addition add to our home. A portable toilet was put on our property. It was there for a year and we finally had it removed. The portable toilet company has sent us an intent to lien because contractor never paid and isn’t paying now. The toilet company has many accounts opened by this contractor and they are all not paid. They don’t even ask for a down payment when asking for toilet to be delivered. So we have also had Unlicensed subcontractors work on our house. Can these unlicensed subcontractor put a lien on our house? Can we do anything about the toilet company with intent to lien? I ask this because they supply to this particular contractor knowing they have past due payments? Our contractor no longer has a license and has not finished the job. We have paid everything except for 2500 for finish. Can they put a lien on our house? We want to leave reviews to notify people of there shady business but don’t want the backlash of an intent to lien from them. They also started another business with new name. Their license expired and they had subcontractors and their owner workers work on our house. Fixing an item that failed inspection.

1 reply

Feb 28, 2020

Unlicensed California contractors and subcontractors will not be entitled to mechanics lien rights if their work requires a license. So, if a contractor or sub has been unlicensed at any point in the job, then they would likely not be entitled to pursue a valid and enforceable mechanics lien claim for the work done there. However, a supplier's lien rights generally won't go out the window simply because their customer - the GC or a sub - is unlicensed. So, if the supplier hasn't been paid, then they may end up with a valid mechanics lien against the project. Before diving into further details, this article should be valuable: I Just Received a Notice of Intent to Lien – What Should I Do Now?

Can renting a portable toilet give rise to mechanics lien rights in California?

Importantly, though - mechanics lien rights are generally available to those who provide labor, materials, or equipment which is used to permanently improve the project property. And, I'm not certain that simply placing a portable toilet on the property for it to be later removed would be the subject of a valid right to a mechanics lien. Typically, for material to be lienable, that material must be permanently attached to the project property - i.e. like installing a toilet in a bathroom. And, for equipment to give rise to lien rights, that equipment must usually be specifically used in improving the land. But, where a toilet is placed for the convenience of others who are actually doing the work, I'm not sure that'd be a sound basis for a mechanics lien. Of course, there is some argument to the contrary. Under § 8402 of the California Civil Code, "A person that provides work authorized for a site improvement has a lien right under this chapter." And, § 8048 defines "work" as "labor, service, equipment, or material provided to a work of improvement." So, when there's a larger construction work of improvement in play, a supplier providing portable toilets may argue that their supplying of a portable toilet constitutes "work."

California preliminary notice and deadline requirements for mechanics liens

Of course, there are other issues that might undermine lien rights. For one, all California subcontractors and suppliers who are hired by someone other than the owner must send a California 20-day preliminary notice. And, if that notice isn't sent, then lien rights won't be available. Further, there's a strict lien deadline in California - 90 days after the lien claimant last furnished labor or materials to the property. So, if more than 90 days pass after material or equipment is removed from the property, then the right to lien would expire, and any mechanics lien filed after would very likely be invalid and unenforceable.

Unlicensed California contractors have more to worry about than lien rights

Unlicensed CA contractors won't be able to lien. But, their worries go much further than that. As discussed in the following article, unlicensed California contractors can be forced to pay back amounts they've already received for the work: Unlicensed contractors in the West are living dangerously — and potentially working for free. So, an owner may end up recovering all amounts they've paid an unlicensed contractor. And, with that in an owner's back pocket, it might be easier to force a contractor to pay all of their subs and suppliers.

Holding a contractor liable for their actions via reviews, etc.

One of the best ways to hold a contractor accountable is to report their actions and unlicensed activity to the California Contractors State License Board. The CSLB was literally designed to regulate contractor activity in California - so that's usually a solid first step. And, informing the CSLB that the contractor has opened a new business under a new name could help them do their job. Further, leaving poor (but factual and honest!) reviews on sites like the Better Business Bureau, Angie's List, Facebook, and Google can help to warn others of the dangers of working with the contractor. As far as blowback goes - if the contractors, subs, or suppliers involved don't have the right to lien or the right to pursue legal claims, and if all the reviews left are honest and factual (and don't rely on opinion), then there might not be much to worry about. But, certainly it's possible a review could anger a potential claimant - and if they're entitled to lien rights or legal claims, that might instigate them into filing a claim.

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