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  1. #1

    Default Mechanics Lien on Residential and Commercial Properties

    My question involves court procedures for the state of: California
    Hi. We are a small service business. We are not licensed contractors as all we do is replace bulbs in homes and commercial properties.
    We are insured and have a business license. We do not do any electrical or wiring. Just change bulbs.
    We actually do not even charge for labor. We simply want to sell the bulbs.
    My question:
    We have been getting stiffed more than we can afford. We took the traditional route of collecting and just not worth it based on the small margins. Buy the time we pay the high collection and or attorney fees and time etc...just not worth it
    We would like to do mechanics liens on the properties. We do have signed contracts that has the language that we can do it...
    1. Can we do it since we do not charge for labor?
    2. Can we do it not being licensed contractors?
    3. If yes to above, does this mean if they sell the home we will get paid via escrow?
    Thank you

  2. #2
    Join Date
    Oct 2006
    Posts
    15,121

    Default Re: Mechanics Lien on Residential and Commercial Properties

    Quote Quoting BettySueThomas
    View Post
    My question involves court procedures for the state of: California
    Hi. We are a small service business. We are not licensed contractors as all we do is replace bulbs in homes and commercial properties.
    We are insured and have a business license. We do not do any electrical or wiring. Just change bulbs.
    We actually do not even charge for labor. We simply want to sell the bulbs.
    My question:
    We have been getting stiffed more than we can afford. We took the traditional route of collecting and just not worth it based on the small margins. Buy the time we pay the high collection and or attorney fees and time etc...just not worth it
    We would like to do mechanics liens on the properties. We do have signed contracts that has the language that we can do it...
    1. Can we do it since we do not charge for labor?
    2. Can we do it not being licensed contractors?
    3. If yes to above, does this mean if they sell the home we will get paid via escrow?
    Thank you
    Well, one solution would be to require payment at time of service for residential customers and to require a deposit from commercial customers. That would certainly be less complex than a mechanic's lien. There are also rules about mechanic's liens that may be difficult for you to follow. I only vaguely remember what those rules are for CA, but its definitely not as simple as putting a lien on property and having it stay there indefinitely.

  3. #3
    Join Date
    Nov 2013
    Posts
    6,090

    Default Re: Mechanics Lien on Residential and Commercial Properties

    You can read about CA mechanic's liens here. And you can read the statutes starting here (8000-8050).

    There are also companies that specialize in handling the lien process for small businesses.

  4. #4
    Join Date
    Jul 2018
    Posts
    1,067

    Default Re: Mechanics Lien on Residential and Commercial Properties

    Quote Quoting BettySueThomas
    View Post
    1. Can we do it since we do not charge for labor?
    California law provides that "A person that provides work authorized for a work of improvement, including, but not limited to, the following persons, has a lien right under this chapter:
    (a) Direct contractor.
    (b) Subcontractor.
    (c) Material supplier.
    (d) Equipment lessor.
    (e) Laborer.
    (f) Design professional."

    Civil Code section 8400.

    The term "work of improvement" is defined in Civil Code section 8050 as follows: "'Work of improvement' includes, but is not limited to:
    (1) Construction, alteration, repair, demolition, or removal, in whole or in part, of, or addition to, a building, wharf, bridge, ditch, flume, aqueduct, well, tunnel, fence, machinery, railroad, or road.
    (2) Seeding, sodding, or planting of real property for landscaping purposes.
    (3) Filling, leveling, or grading of real property.
    (b) Except as otherwise provided in this part, 'work of improvement' means the entire structure or scheme of improvement as a whole, and includes site improvement."

    If your work is done in connection with works of improvement, then you are probably entitled to claim a lien as a material supplier.


    Quote Quoting BettySueThomas
    View Post
    2. Can we do it not being licensed contractors?
    Material suppliers are not usually licensed contractors.


    Quote Quoting BettySueThomas
    View Post
    3. If yes to above, does this mean if they sell the home we will get paid via escrow?
    If you have a valid lien against a property that is in escrow, you might get paid from escrow. However, you said you're not a fan of litigation because it's not cost effective. That applies equally to mechanic's liens. If you record a mechanic's lien, you must file a lawsuit to foreclose the lien within 90 days after recording or the lien become unenforceable. Civil Code section 8460. If your lien becomes unenforceable because you fail to file a timely enforcement lawsuit, and if you fail to release the stale lien on demand, you could find yourself on the wrong end of a lawsuit that could result in you having to pay the property owner's attorneys' fees. Civil Code section 8480, et seq.

    If you're not getting paid, why not demand payment up front or sue in small claims court where you won't need to pay an attorney?

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