Mechanic Liens

Good Evening

California Mechanic's Lien Law provides special protection to contractors, subcontractors, laborers and suppliers who furnish labor or materials to repair, remodel or build your home.

If any of these people are not paid for the services or materials they have provided, your home may be subject to a mechanic's lien.  The result can occur even where full payment for the work of the improvement had been made.

The mechanic's lien is a right that the State of CA gives to workers and suppliers to record a lien to ensure payment.  This lien may be recorded where the property owner has paid the contractor in full and the contractor then fails to pay the subcontractors, suppliers or laborers.  In the worst case, a homeowner may actually end up paying twice for the same work.

The rationale behind this is the constitution and laws of California.  The theory behind the mechanic's lien law is that between two potentially blameless parties, the homeowner who has ordered the work and made full payment of the agreed amount and obtained the value of the work is in a better position to bear the loss than the laborer or supplier who has provided the labor and/or materials to the job site and has not been paid for his efforts by the contractor.  It is the homeowner who bears the ultimate responsibility for making payment for services rendered.  The theory is that the value of the property has increased by the work and/or materials and the homeowner has who has reaped this benefit is required to return to act as the ultimate guarantor of full payment to the persons responsible for this increase in value.

The best protection against these claims is for the homeowner to employ reputable firms with sufficient experience and capital and/or require completion and payment bonding of the work.  The issuance of checks payable jointly to the contractor, material men and suppliers is another protective measure, as is the careful disbursement of funds in phases based on the percentage of completion of the project at a given point in the construction process.

Even if a mechanic's lien is recorded against your property you may be able to resolve the problem without further payment to the lien claimant.  This possibility exists where the proper procedure for establishing the lien was not followed.  Each claimant must adhere to a well established procedure in order to create a valid mechanic's lien.

As in all areas of real estate, the best advice is to investigate the quality, integrity and business reputation of the firm with whom you are dealing with.  Once you are satisfied with your due diligence, make sure you discuss your concerns about the possibility of mechanic's liens with your contractor and a work out a method of ensuring that they will not occur.

It's October 21, 2009 and I am very Bullish on Sacramento

David Ohara

@dwo34

dwo34@aol.com