Legal Question in Construction Law in California

Construction Contract

My father is a contractor and he owns a small construction business. He was contracted to build an addition to a home. Everything was going smoothly. The homeowner was fulfilling his contract obligations by paying in installments while the addition was being built. A few months ago the homeowner said he was low on funds and that he was going to be late on his payments. My father understood his situation and said he would wait for him on his payments as long as he paid him. My father went ahead and built the addition using his own funds to pay vendors and employees trusting the homeowner would eventually pay him. Well the addition is done and the homeowner hasn't made any of the remaining payments. The contract price was for $34,000 and the homeowner has paid $22,000 so far with a remaining balance of $12,000. The homeowner claims he is low on funds and he is willing to pay but in low monthly payments of $250.00 in the next 4 years. My father agreed as long as he pays. Now the question is, do we need to write up another contract that promises he will finish paying in the next 4 years and if we do does this terminate the ability to put a lien on his home if he doesnt pay? Thank you in advance.


Asked on 8/28/08, 8:19 pm

1 Answer from Attorneys
EZRA FRUCHTER LAW OFFICES OF E. LEONARD FRUCHTER

Re: Construction Contract

You need to have a promissory note secured by a RECORDED deed of trust on the owners property. This can be done without court intervention. While a Mechanic's Lien may seem attractive, there are many time constraints which make it inappropriate. Further, you have to file a law suit on the Mechanic's Lien within 90 days of recording it; this is not a requirement for the note and trust deed remedy. The note/trust deed is a simple procedure and you can do it yourself or talk to a real estate professional.

Best of Luck

E. LEONARD FRUCHTER

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Answered on 8/29/08, 12:41 pm


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