Legal Question in Construction Law in California
Sub-Contractor filed Mechanics Lien Against Our Property
We hired a contractor (C) to do demolition work. He rented heavy equipment from another entity (S). We only found out about this because S sent us a preliminary 20-day notice. We paid C $50,000 in full satisfaction for the work. C owes S $20,000 for the equipment rental. S tried unsuccessfully for months to collect from C. Finally (but prior to completion of the project), S filed a mechanics' lien against our property. We need to remove this lien in order to refinance the property, but naturally we don't want to pay twice for the same work!
Assuming that the lien is valid, how can we fix this mess and in what order should we proceed? Do we need to pay off S before going after C? Can we negotiate with S to reduce the $20K amount or is that unlikely to be successful? Do we have any right to C's $10,000 bond? Would our claim be breach of contract? It seems to me that C honored his contract with us since he performed the work. We don't have a formal contract, just a proposal that we accepted.
Any advice would be greatly appreciated. (Please no advice on how to avoid this situation as we don't expect to do this ever again.) Thanks so much.
5 Answers from Attorneys
Re: Sub-Contractor filed Mechanics Lien Against Our Property
I'm a construction lawyer in San Diego. If I do not have a conflict of interest, I would be more than happy to consult with you on this. There is a lot of information missing from your question that would impact an attorney's advice on how to proceed next which can be addressed in a brief phone call.
Re: Sub-Contractor filed Mechanics Lien Against Our Property
Some short answers: Yes, you can almost certainly go after the contractor's bond. Look up his bond on the CSLB website and make a claim. If you're lucky, they'll pay without your having to get a judgment. Second, get a complaint into the CSLB as fast as possible.
Most businessmen will negotiate to avoid litigation. But, I find that most contractors do not foreclose on the mechanic's lien. (Actually, suppliers tend to be more aggressive than contractors.) It's a simple thing to record a lien, but it is quite complicated to sue on it. They have to sue within 90 days of recording the lien. They may not sue so you may want to wait to see if 90 days go by.
In the meantime, if you need to refinance your property, go get a mechanics lien release bond. Call your insurance agent. He may know where to get one. Otherwise, look in the phone book.
Your claim against the contractor would be breach of contract. He didn't fully perform his contract. It was implied that he pay for all his own expenses in performing the work. An oral contract is as valid as a written one. It's just harder to prove.
There is no set order on taking care of these things, but I would go after the contractor right away (CSLB complaint and bond claim) and wait to see if the supplier will actually sue you. If all else fails, you can sue your contractor. You will definitely want to cross complain against the contractor if the supplier sues you. And, as I said, if you need to refinance, get going now on the mechanics lien release bond.
Re: Sub-Contractor filed Mechanics Lien Against Our Property
Construction law attorney- 18 years experienced. Call me directly at 16192223504
Re: Sub-Contractor filed Mechanics Lien Against Our Property
Are you located in LA county?
Re: Sub-Contractor filed Mechanics Lien Against Our Property
You have a mess because you didn't require lien clearances before paying your contractor. This is a pretty common problem for people, because low bid contractors frequently don't do things right because it cuts into their profit. You should hope there really is a bond, and that multiple customers aren't already claiming on it. You could end up having to pay the sub, but should get actual legal advice and assistance before making any decisions on what to do, as there are a series of things you should be doing now to minimize the damage and clear this up. Contact me if interested in doing this right.
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