Legal Question in Construction Law in California

Re: Recourse for non-payment on project

First, you must have timely served a 20 Day Preliminary Notice on the Owner of the property. If you did not, then you likely have no lien rights.

If that is the case, you can sue the tenant directly.

If you did serve a 20 Day timely and properly, then in general, you must record your lien within 90 days of completion. And then, you must timely file suit to foreclose. That generally means suit within 90 days of recordation.

This ia a very technical area of the law. You can visit our website for a more detailed discussion of lien claimant rights.

Good luck.

Re: Recourse for non-payment on project

You have the same lien rights on a tenant improvement on a commercial project as you do on a residential project. If you failed to give the property owner a 20-day preliminary notice, then you can only file a lien against your customers's interested in the lease. If you did serve a proper preliminary notice, then you can lien the property and sue the owner to foreclosure and sue your customer for breach of contract.

Regardless of the status of your lien rights, you can always proceed against the customer to obtain a money judgment.

Re: Recourse for non-payment on project

I recommend that you speak to an attorney regarding this matter. Please review my profile and contact me should you seek representation. Our office serves all of California. I was in construction for 15 years prior to becoming an attorney and I am familiar with this area of the law.

Based on your questions there are a number of legal theories that would be pursued. The main ones would be breach of contract and foreclosure of a mechanics lien.

From your question I assume that your contract is directly with the commercial tenant who is leasing the property. Please let me know if this is not correct and you have a contract directly with the property owner of the building because the analysis will change slightly.

If your contract is with the commercial tenant himself then you can file a mechanics lien against the property but only to the extent of the commercial tenants interest in the property. However, if you did serve a proper 20 day notice under Civil Code 3097 to the property owner himself and have not been paid then you can file a mechanics lien against the commercial tenant and owners interest in the property even though you are not directly in contract with the owner. If you did not file a 20 day notice then your mechanics lien will probably only extend to the leaseholders (commercial tenants) interest. However, if the property owner has "actual knowledge" of the construction, then you may be excused from serving a 20 day notice (See Kim v. JF Enters (1996) 42 CA4th 849.) so that your lien would extend to the property owners interest as well.

I suggest that you:

1)immediately file a mechanics lien on the property;

2) write a demand letter to the customer demanding final payment by a specific date. Give a very short time frame to comply such as 1 week. In the demand letter let the customer know that he is in breach of contract by not paying timely; and

3) Hire an attorney to file a lawsuit against the other party.

Thank you for your question and please contact me should you seek representation.

Re: Recourse for non-payment on project

You can certainly sue, you may be able to lien the tenant and owner. Your focus should be on collecting the money, which means suing if they won't pay. A timely and properly served lien on the owner would give you some additional rights and security in the suit, but if you haven't already served the lien within 20 days, just get the suit started, or at least have an attorney make a payment demand. If that works, you get paid quicker. Feel free to contact me if interested in doing so.