Legal Question in Construction Law in California

Im in California and have a construction project in which the contractor has not been back to the job site in 2 months. He was contracted to do some but not everything on the project because I'm in the stone business and can do certain parts of it myself. Our contract lists everything he will do along with the costs associated with that item. I have told him that if he can't get back to the job site to finish what we agreed to, i will need to hire others to finish the project and deduct it from our contract. I still owe him enough money to complete the project using others. Im concerned that he may put a lien on my property. I have received lien releases from those that he subcontracted out to do certain things. What can i do to protect myself from a lien?


Asked on 12/04/13, 8:23 am

1 Answer from Attorneys
Nick Campbell Builders Law Group

Your first step is to look at the contract and see what your rights are to terminate the contractor, such as notice and right to cure requirements. Assuming you have done what you need to do in that regard, you could probably terminate the contractor.

You are entitled to withhold 125% of any amount "reasonably in dispute." As the cost to complete is in dispute, you can withhold from what you owe him that amount. I would suggest in your "termination letter" you explain why you're not paying him and the calculations for such.

You're not going to be able to prevent him from recording a lien. Contractors, subs and suppliers record improper liens all the time. If he does record a lien, your options are to try to expunge it through the courts (after trying to get him to remove it voluntarily) and you can recover your fees and costs if successful; or you can file a "full-blown" lawsuit and seek recovery of your damages as a result of the cost to repair, especially if it exceeds the estimated amount owed to complete the contract (you are entitled to recover those amounts).

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Answered on 12/04/13, 10:22 am


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