Legal Question in Construction Law in California

Re: Design profession mechanic's lien

Great question. My wife is an architect and I've looked at the law of design professions' liens quite closely.

The first question to ask is whether you obtained a building permit for these works of improvement. If not, no design professionals' lien may arise, and said lien is of no force or effect.

The second question to ask is whether the architect mailed to you by first class mail a demand for payment at least 10 days prior to recording the lien. Your question indicates that he did not, and if that is correct, the lien is invalid.

The third question to ask is when did you give notice that you were not going to continue with the project? Did you keep that email or record that discussion? This lien must be recorded within 90 days of that notice. If it were recorded after 90 days, the lien is invalid.

The fourth question is how much time has elapsed since the document was recorded? These liens go stale after 90 days. This means that they must be foreclosed within 90 days, or they are worthless.

The fifth question to ask is whether the architect has included in his or her lien claims for services not provided. That is, does this $19k exceed the contract value of the services actually provided? If so, the entire lien is forfeited.

With this understanding whether the lien is valid, what do we do about an invalid lien?

If the architect does not file an action to foreclose within the 90 day time period to do so, an attorney can petition the court to have that lien removed and obtain his or her attorneys fees from the party who wrongfully recorded the lien.

If you prefer not to wait for those 90 days to expire, you may file a lawsuit seeking declaratory relief - a declaration that the lien is invalid - as well as a temporary restraining order enjoining the architect's foreclosure on the lien. However, it's harder to get your attorneys fees back in this lawsuit.

If the architect does file an action to foreclose on the lien, you can defend on any of the grounds that mentioned above. Additionally, if it was patently obvious that the architect had no reasonable grounds to record the lien (e.g., never obtained building permit), then you may file a cross-complaint seeking damages for malicious prosecution.

If you wish to avoid all of these lawsuits, you may have an attorney send a letter to the architect pointing out the flaws in the architect's case and demanding that the architect sign and notarize a lien release. Of course, no attorneys fees are recoverable here.

Finally, the fact that the lien is invalid has no bearing on whether you may be liable for a breach of contract. Put another way, even if you get the lien removed from your property, you may nevertheless be sued on the contract. To analyze that question, we would need to review a copy of the contract to see what it says about your premature cessation of the project.

I hope this helps you assess your situation. Call if you need help.