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Working with General Contractor in 50 States when we only have license in 1 State

CaliforniaLicensesLien DeadlinesMechanics Lien

We are about to sign a Master Service Agreement with one of our major customers who have projects for us nationwide. We want to make sure we have our rear-end covered in terms of collections. So I want to double-check on the subject of lien rights in different states so that we can get ourselves protected just in case our general contractor becomes insolvent. Long story short, we currently only have a license in California, and typically for the projects that we are doing in other states, we would pull permits from this General Contractor, who has a license in all 50 states. Partnering with them would provide us with a tremendous amount of opportunity. My question is that, knowing that we don't have licenses in all 50 states, would it automatically forfeit our rights to file a mechanics lien in an event where the General Contractor goes under? Do we still have the ability to collect funds from the end customer? Maybe it is a state-by-state case? If so, which are the states we need to keep an eye on? And which states we can still file a mechanics lien, knowing that we don't have a license in those states?

1 reply

Jan 28, 2022

Although we do not know your trade or nature of your work, it is likely you will need a proper contractor's license in most states not just to enforce mechanics lien rights --- but to lawfully perform work within that state. You are right that it is a state-by-state analysis. We have performed similar anaylses fo clients that have grown their businesses across the country and you should consult with an experienced construction and licensing attorney(s) to make sure you have properly set your table before you enter into contracts (I assume work orders based off your MSA) for projects in these other states.

--CN

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