What to expect when filing a mechanics lien
No contractor enjoys collecting debts. The process requires time, persistence and is just an added nuisance. Many contractors are in charge of paying out other subcontractors, as well. When someone fails to pay you for your work, multiple people feel the sting. Fortunately, there are solutions to an otherwise frustrating problem.
In California, a contractor can place a mechanics lien on a homeowner’s property until person pays their debt. Contractors usually notify homeowners of this right from the very beginning. Regardless, some people ignore certain parts of the contract.
As a direct contractor, you can file a property lien with the county, as long as it is within 90 days of the finished project. You will need to send your client the notice with the claim first.
There are certain reasons why it may be valid to file a claim for lien, which includes:
- Your customer failed to pay part of their bill.
- Your customer is late in paying for their bill.
- Your customer failed to pay the full amount of their bill.
- Your customer goes against the payment schedule in the contract.
In some cases, contractors require pay before a project is finished. You cannot file a claim for lien if you are still working on the project. For example, it is a 10-month project, but the contract outlines the first payment after 5 months. Although the homeowner may go against their word, you will need to wait to file until the work is completed.
California Statues get complicated. If you have questions about filing a property lien, it is important to be proactive in seeking legal guidance. Filing too late could result in losing out on the compensation you deserve.