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What are the options as the property owner in response to a pre-lien notice?

An HOA property manager asked a plumber from Aquatek company to come out to give an estimate on a water heater replacement work. The contractor actually performed the work without giving a quote and without getting an authorization to do the work. Aquatek then sent a bill of $6000 (compared to other contractors’ quotes were $4000 and $4200) along with the Pre-lien notice demanding the payment in full. Is this legal? What are the options for the property owner? Thank you!

2 replies

Jun 19, 2020

If there is no quote, then there is no formal work authorization and arguably no contract. Aquatek could be characterized a volunteer not entitled to payment. However, for both parties, the courts are not a logical forum for resolving this dispute and it is unlikely that it will prosecute a lien for such a modest amount if there is no signed contract because Aquatek is not entitled to legal fees in a mechanics lien action. I suggest that you escalate this issue to senior management at Aquatek. Aquatek performs a lot of services to the HOA community and it desires to foster good relations with the property management firms that service them.

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Jun 19, 2020

Here, the owner of the property has an argument that there was no contract for the services rendered and as such, the contractor can only seek payment through a claim for unjust enrichment. However, with this claim, the contractor must prove the value of the services rendered, which in this case is likely closer to the average of the bids received. You may also want to see if you can file a claim against the contractor with the California State Contractors Licensing board for fraud, as you never authorized him to do any work and only authorized them to give you an estimate. The biggest problem you have is the cost to litigate this matter, which would cost you more than the difference between the $6k asked and the reasonable value of the work, which is likely around $4.2k.

I would call the California Contractors Board before you agree to pay anything. They may be able to help you.

Good Luck.

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