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We are an equipment rental company. What are our lien rights when we are renting to a customer that is then renting our equipment to someone else

CaliforniaMechanics Lien

We are an equipment rental company. What are our lien rights when we are renting to a customer that is then renting our equipment to someone else? Are we able to secure lien rights and be protected?

1 reply

Nov 30, 2017
Whether or not lien rights exist in this situation may come down to how a court would define the role on the project- on one hand, a court could consider this arrangement to be a supplier to supplier relationship for which lien rights may be in question. On the other hand, the relationship could also be construed as a supplier to subcontractor relationship, or some other configuration. Ultimately, there won't be a black and white answer in California, but considering California statute is rather broad in granting lien rights, a lien could very well be available. Ultimately, if a lien claim is properly filed, made in good faith, and if there is a valid basis for the lien claim, it is unlikely for penalties for fraudulent or improper liens to come into play. If a claim is filed and disputed thereafter, releasing the lien is always an available option.
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