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We have not been paid in a commercial Tenant Improvement job in CA since July. What should we do as a subcontractor?

CaliforniaPayment Disputes

Hi, I was working as a subcontractor in a commercial build-out in California. We have submitted pay Apps monthly and in the contract there is a waiver of lien against the owner. GC refused to pay us with the reasoning that the tenant has not paid them. We have been in this project since June and we completed the job in October. Although we submitted the pay apps regularly, we have not been paid since the first day of job. In the contract we have the term that the GC will pay subs when owner payment is received. What do you recommend us to do? Regards,

3 replies

Nov 12, 2022
Assuming you served the proper parties with the Preliminary Notice within 20 days of commencing work, then you can serve the Stop Payment Notices. If the project is finished, you need to submit the Notice of Mechanics Lien and file the Mechanics Lien within 90 days of the project being finaled. Please note that period is shortened to 30 days if a Notice of Completion or Cessation was filed. If a Notice of Non-responsibility was posted by the property owner, then it gets more complicated, and you should immediately reach out to a Construction Lawyer. Otherwise, you can contact levelset directly to help you with the documents.
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Nov 12, 2022

A few things. First, you cannot waive a lien before work begins in California. The contract may say that, but its not enforceable in court. Second, that clause about pay-when-paid has limits to it. They still have to pay you within a "reasonable" time. It's not some indefinite period that then becomes a "pay-if-paid" clause, which like above is not enforceable in court. 

A construction attorney can walk you through some options which can include a breach of contract claim or lien foreclosures. 

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Nov 14, 2022
Sue them
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