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What if our general contractor hasn’t paid his team?

We are near the end of our kitchen remodel and the construction team has stopped working with our general contractor because they haven’t been paid. As the owner, we’ve paid every progress payment, in full, on time. Are we at risk of a mechanical lien or any other legal actions because the construction crew hasn’t been paid? (We’re in California)

1 reply

Dec 18, 2019

Unfortunately, this is a difficult situation to be in. Mechanics liens are meant to protect subcontractors and suppliers in this exact situation. When owners begin construction work on their property, it's important to be proactive to protect yourself in case payments aren't properly made down the contracting chain.

California Mechanics Lien Rights

First, before worrying about mechanics lien, be sure that the subs in fact, have the right to file a lien. Under California mechanics lien law, anyone who is working on a private construction project must provide a 20-day preliminary notice to secure their right to file a mechanics lien. These should be sent to the property owner within 20 days of first providing labor or materials to the project. Late notice can still be valid to secure lien rights, but it will only cover labor and materials that were provided in the 20 days preceding the notice and onwards.

Collecting Lien Waivers

The best way to prevent this type of situation is to require lien waivers with each payment. California lien waivers have some specific requirements, but these should be collected by the GC and submitted to the property owner in exchange for payment. Here are some helpful resources with more information:

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