Legal Question in Construction Law in California

Re: ''reverse'' mechanics liens?

The short answer is no.

Mechanics liens arise by way of the California Constitution, and apply to land and that which is permanently affixed to land. Obviously, this doesn't include tools.

If you retain those tools, the contractor will have a claim against you for their replacement value, which is going to eat into your claim against the contractor.

Also note that you are very unlikely to get anywhere with the surety company. It used to be the case that you could just write a detailed letter and get a payment on the bond. But it seems that sureties are now really in the business of receiving payment for bonds, but not paying out on those bonds. Especially SCP. So now I just forego the honorable step of a letter or phone call and just name the surety as a defendant in my cases and including a cause of action for recovery on the bond.

You're in a tight spot with the tools. They may be the only assets this defaulting contractor actually owns. Still, your unlawful retention of them could run against you in court, and were I defending the contractor, I'd say you've come into court with Unclean Hands. Might as well make them available to the contractor.