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We are out of the time frame to place a lein, what happens?

CaliforniaRecovery Options

We allowed payment arrangements with a company to pay us back in three payments. One payment in November, December and January to be paid off by February. Their first payment came in December and I have made several attempts to receive the 2nd payment due in December. But there has been no return correspondence. Not sure where to do.

1 reply

Jan 21, 2019
I'm sorry to hear you've gone unpaid - especially after going through the trouble of laying out a payment plan. Before looking to other potential remedies, it's worth making sure that the deadline to file a mechanics lien has truly past since liens can be so effective to compel payment. In California, the deadline to file a lien will depend on who the claimant was hired by. If the claimant has a contract directly with the owner, that claimant must file their lien before the earlier of either (1) 90 days of completion of the project, or (2) within 60 days of the owner recording a Notice of Completion or Cessation (if one was filed). For claimants hired by someone other than the property owner, a mechanics lien must be filed before the earlier of either (1) 90 days after the completion of the project, or (2) 30 days after the owner records a Notice of Completion or Cessation (if one was filed). If the lien deadline has truly come and gone, there are still a number of other options available for recovery. zlien discusses those options in depth in this article, as well as this one. Still, let's look at a few popular recovery options when lien rights might not be available. First, sending a Notice of Intent to Lien can be effective even in situations where the lien deadline has passed. Because mechanics liens are such a drastic remedy, many owners will not be willing to call a claimant's bluff and will be open to discussing resolving the issue so that a lien claim will be avoided. More on that, here: What is a Notice of Intent to Lien? Another option might be to threaten legal action - such as a breach of contract claim, an unjust enrichment claim, or a claim under California's prompt payment laws, to name a few. While litigation can certainly be effective, the threat of litigation (much like the threat of lien) is often effective to force payment without actually having to take legal action. Finally, while legal action may ultimately become necessary, it's also worth noting that taking a dispute to small claims court may also be an efficient and effective option depending on the amount of the claim (CA small claims court only accepts claims of $10,000 or less). Of course, small claims court is just as risky as traditional litigation - and often even riskier. For more on that option, this is a good resource: Guide to Small Claims Court.
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