Legal Question in Construction Law in California

Re: Mechanics lein's

How is it that GC is paid in full if construction not complete? That in and of itself is a big problem - because you have lost a lot of leverage. As the owner, you have a retention provision in the contract - it is common to retain up to 10% post completion, pending resolution of issues such as these.

When you paid the GC (in installments, presumably), did you receive lien releases from the GC and the subcontractors and material suppliers? If so, these these liens may be void. If not, then you could have problems.

The mechanics lien statutes do not generally care if you already paid the GC. If the GC did not pay the subs, then you could be on the hook twice.

The statutes are complicated, and there are a variety of technical issues. For example, if you are not in direct contract with the subs, then the subs, in order to maintain a valid lien, likely must have recorded and/or served and/or posted a 20 day prelim lien notice.

You should immediately contact the GC and make demand that the GC resolve this matter. If push comes to shove, you will have to sue the GC and file a complaint with the CSLB. Careful - your contract with the GC may require you to go to arbitration.

Also contact the subs and get them involved in the process. The subs have up to 90 days to file suit on the liens, for foreclosure.

Re: Mechanics lein's

Worry. This means the contractor didn't pay them. Unless you can force him to do so, they will sue you and collect. Feel free to contact me for legal help in this.