Category: Construction Law: Payment

Time and time again I receive calls from subcontractors and suppliers who find themselves faced with a customer who is either unwilling or unable to pay for labor or materials supplied for a private works project. As an attorney, the first question I usually ask is “did you serve a Preliminary Notice?” The second question I usually ask is “did you serve the Notice within twenty (20) days after first furnishing labor, service, equipment or materials to the job site?” The answers to these questions will often determine the ability to collect on the claim.

The California Mechanics Lien is one of the most valuable collection devices available to contractors, subcontractors and suppliers who are unpaid for work performed and materials supplied in relation to a California Private Works project. The mechanics lien allows the claimant to sell the property where the work was performed in order to obtain payment. The process starts with the recording of a mechanics lien in the office of the County Recorder where the property in question is located. As noted below, certain deadlines must be met.

I was recently contacted by a commercial building owner in the process of trying to sell the building. Two years prior to this, a subcontractor had recorded a mechanics’ lien with the local County Recorder’s office in relation to the owner’s property. The subcontractor recorded the mechanics lien after the subcontractor was not paid by a prime contractor for work the subcontractor had performed on the property. Unfortunately for the subcontractor, the subcontractor then failed to file a lawsuit to foreclose on the lien within the requisite ninety (90) day time period for filing a lawsuit to foreclose on the mechanics’ lien. Since the subcontractor missed this 90 day deadline to file the mechanics lien foreclosure lawsuit, the mechanics lien expired.

The California mechanics’ lien is a powerful tool for contractors, subcontractors and materials suppliers to secure payment of unpaid construction-related debts. A contractor, subcontractor or materials supplier is allowed a lien on real property, based on the value they add to the property during the construction process.

Most in the construction industry are familiar with the rules of California mechanics’ liens. They know that the Preliminary Notice of Civil Code Section 8034 and 8200-8216 is often the foundational document and that the deadline to record a mechanics’ lien is generally triggered by events occurring at the end of construction, including completion of the work of improvement and the recording of the notice of completion or notice of cessation. Most of these rules are found in California Civil Code sections 8160-8494.

The Situation California Construction Subcontractors Face in Obtaining Payment: California construction subcontractors find themselves faced with a significant payment issue … Continued

The Contractors’ State License Board (“CSLB”) represents the interests of the public in California construction matters. In the field of … Continued

When working on federal public works construction projects there are no Stop Payment Notice or Mechanics Lien remedies available to … Continued