Legal Question in Credit and Debt Law in California
Can a contractor file a mechanic's lien if his license has been temporarily suspended due to non-payment of bond?
1 Answer from Attorneys
Yes, if the work was performed before the suspension. Fortunately or unfortunately, the law is VERY strict that a contractor cannot do ANY work except while validly licensed, and although to my knowledge it has not been tested in court, the way the law currently reads if any work is done while suspended or not licensed, the contractor not only cannot collect for work done while suspended, the contractor also cannot collect for ANY work on the project, AND the owner can even take back what has already been paid. For unlicensed contractors that rule has been strictly applied. As I said, I haven't seen a case on whether the courts will find a less horrible penalty for a temporary suspension due to a bonding issue. So it is essential that a contractor do everything possible to at least get a retroactive reinstatement in the case of an administrative suspension (if suspended for misconduct, they're probably out of luck if they keep working).