Home>Levelset Community>Legal Help>We hired a licensed contractor to install approximately 1000 sections of pallet racking in a tenant occupied building and they are not paying us. We have paid the laborers. Do we file a contractors lien and what are we considered in the lien?

We hired a licensed contractor to install approximately 1000 sections of pallet racking in a tenant occupied building and they are not paying us. We have paid the laborers. Do we file a contractors lien and what are we considered in the lien?

We hired a licensed contractor to install approximately 1000 sections of pallet racking in a tenant occupied building and they are not paying us. We have paid the laborers. Do we file a contractors lien and what are we considered in the lien? In addition, the tenant is not paying the owner of the building and he is aware of our intention to lien and is on our side.

1 reply

Sep 28, 2018

That's a very interesting situation, and unfortunately, I'm not sure I completely understand your role on the project or who has failed to make payment to you. However, discussing lien law basics and exactly who has the right to lien in California should clear up confusion as to who can and who cannot file a mechanics lien and when liens are appropriate. Generally, mechanics liens are available for the benefit of those in the construction industry who perform work and go unpaid. When a lien is filed, the lien encumbers the property where work has been performed - this grabs the attention of the owner and any other parties in charge of the project. Because the filing of a mechanics lien threatens the property title and the project's success, a property owner, tenant (if applicable), and general contractor typically need to resolve the lien claim in order to move forward. In California, a person that provides work authorized for a work of improvement will have the right to lien. § 8048 of the Civil Code defines "work" as "labor, service, equipment, or material provided to a work of improvement." Further, a "work of improvement" includes " (1) Construction, alteration, repair, demolition, or removal, in whole or in part, of, or addition to, a building..." So, where a claimant has been hired by the owner of the property or some agent of that owner (including their tenant, contractor, subcontractor) and has provided labor, services, or material to improve the property, typically, lien rights will arise. Though, there are other requirements for filing a lien which should be followed (you can learn about those here: California Lien and Notice FAQs). Finally, it's worth noting that there are other options that might be available for recovery beyond the use of a mechanics lien. For one, the mere threat of a lien can go a long way. By sending a document like a Notice of Intent to Lien, a claimant can show the non-paying party that they mean business and that, if payment doesn't come, a lien will be filed. Further, the threat of legal action can also go a long way - especially when a demand letter is sent specifying what actions may be taken and the timeframe for those actions. When sent via an attorney, such a letter may carry a little more "umph" as well. Of course, if all else fails, resorting to legal action can also be effective.

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