Mechanic's Lien Question in CA?

Question

Can a subcontractor place a mechanics lien on a property, if he didn't send a 20-day preliminary notice first?
The general contractor has been paid - but issued "bounced" checks to the subcontractor.
How does it work in California?

Answer 1

The previous answer is incorrect. Mechanic's lien remedies are available to prime and subcontractors, as well as materials suppliers, architects and engineers who contribute to a work of improvement. Subcontractors (anyone who does not have a direct contractual relationship with the owner) are required by law to serve a preliminary notice on the property owner as soon as they enter into a contract or perform services exceeding $400 (Civ Code 3097(h)). The preliminary notice is a prerequisite to any subsequent mechanics lien (or stop notice) action. I have written an article on my blog that addresses the preliminary notice in depth (link below).

Had you properly served the notice on the owner within 20 days of the date you started working, you would be entitled to mechanics' lien remedies for the value of the work you provided (and the value stated in the preliminary notice).

Absent the mechanics' lien, your only remedy is with the contractor for breach of contract. Depending on the amount, you may be able to go so small claims (up to $7500 if your contracting company is a sole proprietorship; up to $5000 if your company is incorporated).

Don't forget about the prime contractor's bond, which is now $12,500. You can look up his bond company on the CSLB's website; contact the surety and request a claims packet. The downside is that if others also have claims against this contractor, you will all receive a pro-rated portion up to the $12,500 bond. If he bounced checks to you, he probably bounced checks to others as well, so you could end up only receiving pennies on the dollar. But then you can always go to court for the rest...

Good luck.

Answer 2

The subcontractor would be suing the contractor for the bounced check. The mechanics lien only applies if you have direct dealings with the customer.