Legal Question in Construction Law in California

Wildly fraudulent Mechanics Lien

The general contractor on a condo conversion project was fired, which is allowed under the contract (Termination for Convenience). Fired GC proceeded to file a Mechanic's Lien on the property for the remaining value of the contract--NOT for the value of actual unpaid work completed but the value of future work had he stayed on the project to the end. We are now unable to close condo sale escrows due to the cloud on title. Waiting 90 days until he files a lawsuit to perfect the lien means tremendous lost income for units that we can not close. What recourse exsits for such a blatant abuse of Mechanic's Lien Law?

Asked on 10/23/06, 6:35 pm

6 Answers from Attorneys

Carl Starrett Law Offices of Carl H. Starrett II

Re: Wildly fraudulent Mechanics Lien

If you have the resources, you can always obtain a mechanic's lien release bond. Any legal remedy will take months to resolve, so there is not quick remedy besides a release bond or a negotiated settlement. You need an attorney as soon as possible.

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Answered on 10/23/06, 6:40 pm

Terry A. Nelson Nelson & Lawless

Re: Wildly fraudulent Mechanics Lien

Your remedy is to either bond around it, or bring legal action to clear your title of the lien. Compare the price of the bond to the price of seeking an ExParte order. Feel free to contact me if you decide to take action.

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Answered on 10/23/06, 6:49 pm
Gary Redenbacher Redenbacher & Brown, LLP

Re: Wildly fraudulent Mechanics Lien

Just call your insurance broker and ask him if he can get you a mechanics lien release bond. That will immediately free up your title. There's also a fairly quick legal procedure for getting rid of a bad lien, but if the 90 days haven't expired on the lien, it can be pretty tough to come up with enough proof quickly that the lien is false. And, since you have to hire a lawyer, it's almost always more expensive than just buying the bond. Buy the bond and you can worry about the contractor down the road.

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Answered on 10/23/06, 9:02 pm

Re: Wildly fraudulent Mechanics Lien

If you cannot bond it for a release call me directly at 16192223504.

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Answered on 10/23/06, 10:16 pm
Michael Olden Law Offices of Michael A. Olden

Re: Wildly fraudulent Mechanics Lien

if you are correct he has screwed up big time and his intentional or neglegint act will cause you substantial damages. i would recommend bonding after you have employed an attorney who has handled real estate law and mechanic's lien as i have done in the s.f. bay area. get your lawyer first and he/she will advise you

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Answered on 10/23/06, 11:47 pm

Re: Wildly fraudulent Mechanics Lien

If the lien claim includes monies or materials not included in the work/project, then the lien is defective.

You do not need to wait 90 days for the lien claimant to foreclose; in fact, there is no guarantee of foreclosure. The claimant is not required to foreclose - he/she may simply let the claim go stale.

You can bond around the lien; this is done all the time. Your escrow agent, loan officer, and/or title agent should be familiar with this process. This way, your transaction is not delayed.

If that is not an option (for whatever reason), then you must immediately file suit against the lien claimant and seek ex parte (emergency) relief from a court to expunge the lien. This is a highly factual process, and there is no guarantee of success.

Either way, if you want to move to avoid the lien, you will have to file suit.

If you need assistance, call or email. We represent lien claimants and lien resistors quite frequently, and we are familiar with the procedure.

Good luck.

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Answered on 10/24/06, 12:34 am

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