Legal Question in Construction Law in California

I am a licensed contractor, just finished a project and find out that the home owner is behind in payments and is in default. this is an insurance project so the check was written to the home owner and the mortgage company. the homeowner tells me that if he deposits the insurance check that will be used to pay us, the bank will take our money to recoup losses. is this legal and am i really second in line to get paid?


Asked on 10/06/11, 10:41 pm

1 Answer from Attorneys

The owner is correct that the scenario they have outlined could happen. I hope you have been following the procedures to protect your mechanics lien rights and there is some equity in the house. If so, it may involve some hassle but you will eventually get paid. If not it could get dicey. What you want to try to do is get the insurance company to issue a new check with you as the third payee. The mortgage company has benefited from your work and even though they will likely grab the money if it is just deposited, they should be willing to get you paid if they are presented with a joint check that includes you. One other issue I note is that your zip code is for an Oregon community. Are you a California licensed contractor and the project was in California? If not, nothing I have said is reliable. If the project is in Oregon, ignore pretty much everything. If it is in California and you are not licensed in California, the law here is that you get paid nothing for unlicensed work and must refund anything you have been paid.

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Answered on 10/07/11, 8:31 am


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