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What are my options as a general contractor to collect payment on unpaid invoices if we have missed the deadline to file a mechanics lien?

CaliforniaMechanics Lien

We have 2 projects that were both send their final invoices in February of this year. We stopped working there over a year ago but had several f/up visits by our superintendent to address punch list items. Last visit by super was 9/2017. Somehow both of these jobs were never sent their final invoice until a couple months ago and neither are paying. What are our options?

1 reply

Apr 19, 2018
First, I'll note that since California is a state where the lien deadline is based off of project completion (or the filing of a Notice of Completion), there may be some grey area as to when the project is considered "complete." But, completion is considered the earliest of "(1) Actual completion of the work of improvement. (2) Occupation or use by the owner accompanied by cessation of labor. (3) Cessation of labor for a continuous period of 60 days. (4) Recordation of a notice of cessation after cessation of labor for a continuous period of 30 days." Plus, if a work of improvement is subject to acceptance by a public entity, completion occurs on acceptance. So if a claimant has been off the job site for an extended period of time, that very well could be a losing argument. If a lien claim is truly unavailable, there are still plenty of recovery options available. For one, sending a Notice of Intent to Lien (even where lien rights might not be available) is often effective to speed up payment. Because a mechanics lien filing can be such a chore to deal with, it's risky business for an owner to try and call a claimant's bluff. Another option may be to send a demand letter - and doing so through an attorney can help pack some extra punch. Such a demand might inform an owner that legal action will be taken if payments are not made. If that doesn't work, legal action will likely be an available remedy. An unpaid contractor will likely have legal remedies available to them as well - such as a breach of contract claim or an unjust enrichment claim. Filing suit, or threatening to do so through an attorney, is a great way to show an owner that nonpayment will not be tolerated. Granted, litigation has its risks and can be expensive. Ultimately, if demands are made and payment is still not forthcoming, consulting with a local construction attorney might be the best move. They will be able to assess the circumstances surrounding your situation and advise on how to move forward.
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