Legal Question in Construction Law in California

Re: How to defend a lawful or unlawful mechanic's lien

Higher a real estate attorney immediately, give them all of the details and yet good solid legal advice from a knowledgeable, experienced person dealing in this area. What person doesn't have a written contract and pays $5000 to another. 0h yes, I have litigated and taught mechanic's lien law for 30 years and you have more faxing your favor than he does. if he sues you he probably doesn't have much of the chance andyour attorney should win hands down. The problem is it still a lawsuit which will take time, expands any great deal of aggravation. Please learn from this lesson.

Re: How to defend a lawful or unlawful mechanic's lien

From what I read, you have several things working in your favor. First, the contractor is presumably unlicensed. Accordingly, he cannot sue in court to recover money he claims he�s owed. That means that if he does record a lien against your property, he would almost assuredly lose. To foreclose on his lien, he would have to file a lawsuit in court for that specific purpose. If he cannot prove licensure, your counsel should be able to easily terminate the suit in your favor long before trial.

More importantly, if he is indeed unlicensed, the same Business and Professions Code section that precludes his lawsuit, gives you the right to recover any and all sums you paid to him. It�s a harsh law, but the legislature clearly wants to deter and/or punish unlicensed contractors.

He is also in violation of another code section that requires a written agreement for a home improvement project. That same code section makes it illegal for a contractor to take a down payment over $1,000.00. Contractors� down payments on home improvement projects are limited to the lesser of 10% of the contract price or $1,000.00.

Because the contract is verbal, there are numerous other requirements that he�s failed to meet. You would have an excellent chance at having a court void the contract.

So, in short, whether he�s licensed or not, he faces so many problems, he�d be very unwise to actually record a lien. Along with a high probability of successfully defending a suit to foreclose the lien, you might also be able to prevail in a subsequent lawsuit against him for abuse of process and possibly malicious prosecution. However, if I were representing you, I would suggest being satisfied with simply getting your money back. From your description of his antics, he�s probably insolvent now, or close to it.

You should act quickly to get your $5,000.00 back. I�d suggest contacting an attorney in your area who is conversant with construction litigation, and especially the Mechanics Lien Law and Contractor�s License Law.

Best of luck, and feel free to contact me if yo have further questions.

Now the inevitable caveat: The foregoing analysis is offered as an accommodation only, and does not constitute a legal opinion based on comprehensive review of all the facts, documents and law related to the issue. No attorney-client relationship is expressly or impliedly formed by provision of the foregoing information.

Re: How to defend a lawful or unlawful mechanic's lien

I can only add a couple of thoughts to Mr. Newton's comprehensive reply. Mechanic's liens are pesky things, but nevertheless drop off unless enforcement action is taken in court within a fairly short time.

Your possible problem here is that not only contractors are entitled to file and enforce mechanics' liens -- such liens can also be filed and enforced by materialmen, subcontractors, laborers, architects, etc.

Since this guy's principal first round of activities was to get a permit and buy materials, none of which involves on-site services (to any extent, at least) there is the possibility he will file his lien as a materialman or some other capacity that doesn't require a license.

Your other problem, possibly more significant, is that this guy has your five grand. I have personally made the mistake of advancing money to even licensed contractors and never seeing them again. Get as much money as you can as soon as you can, then if you feel so inclined sue him for the rest, plus some general damages, in small claims.