i hired a contractor that owns a design firm, who sub-contracted a shutter company to install plantation shutters in my home last September. I stopped payment on the last payment of $2000 due to the poor workmanship, and terrible quality. The shutter company came out several times to fix the repairs but still never finished everything. The last time they came out was May 9th of this year and still did not finish. We received a lien on our home yesterday and I would like to know my rights as a home owner. Also, how could a lien be placed when he did not finish the job?
3 Answers from Attorneys
California has a substantial body of statutory law dealing with liens by contractors doing "works of improvement" to real property ..... it is in the Civil Code, and covers sections 8000 through 8848. It's much too lengthy to explain completely in an on-line answer, but suffice it to say that contractors doing works of improvement on real estate have a right to file a preliminary notice that their work to be performed may result in a lien on property, and then to file a lien if unpaid. The lien can be filed without going to court and getting a judgment; it is a form of "mechanic's lien." I suggest that you and the contractor sit down and have a cool-headed discussion of why the work does not conform to the contract. If this doesn't work, maybe you'll have to go to Small Claims Court and have a judge thrash things out and give the parties a verdict. There are penalties against contractors who file improper liens, and procedures for expunging them. The code sections (8000-8848) run about 32 pages of fine print, but a lot of it doesn't apply to your case and it's fairly easily understood by a non-lawyer, as statutes go, so you might want to look it up.
A contractor is generally entitled to record a mechanic's lien for unpaid amounts. There are a lot of rules and procedures that need to be followed in order for a contractor to be legally entitled to a lien and to enforce it. A subcontractor without a direct contract with the owner has additional requirements.
A subcontractor must serve a preliminary notice before recording a lien. If he didn't, the lien is not enforceable. The preliminary notice and lien must meet specific statutory requirements. If not, the lien is not enforceable. There are strict time limits associated with both. Failure to comply will render the lien unenforceable. Whether any of these issues apply to your situation is impossible to say on this forum.
A general contractor has an obligation to make sure your property is kept free of liens from subs and suppliers. You may be able to dump this on the contractor to take care of.
I thing I often tell owners facing a lien is to wait 90 days to see what the contractor will do. For amounts that are small, the cost of enforcing the lien is more than can be recovered. Contractors will often let the 90 time period to enforce pass by, hoping you will just pay. If that happens, there is a process that can be followed to get the lien removed without paying. If done properly, an owner can be reimbursed for any attorneys fees incurred. On one such matter that I handled recently, I was able to recover nearly $7000 for having to remove an invalid lien.
You may want to consult with a local construction attorney.
I hate it when generalist lawyers answer construction law questions. There is a lot that is correct in the previous answers but a few things that are just flat wrong. For example, if you withheld payment, you can't dump it on the contractor. The contractor is only obligated to keep the project clear of liens if you have paid the contractor in full. The most important and correct part of both answers, though, is you need to go over everything with knowledgeable construction lawyer.