Contractors in California who do good work have every right to expect the owner of the project to compensate them for their work, but what happens when the owner fails to pay up? It's not quite as simple as it might be in the case of people who fail to make their car payments, in which case the bank can essentially swoop in and repossess the vehicle. In the construction business it's not very likely that the contractor will be able to remove the improvement or building from the owner's property, so what legal steps can a contractor take to get the owner to live up to his or her end of the bargain?
The best course of action for a contractor in this situation may be to think about contacting an experienced California construction law attorney. An attorney may suggest the contractor obtain a mechanic's lien or a stop payment notice. These legal remedies allow a contractor to put a legal claim on another piece of property owned by the owner to be used to satisfy the contractor's claims in the event the owner does not pay the amount as agreed upon in the construction contract. Once a mechanic's lien is successfully perfected, the owner's property may be subject to foreclosure or sale to satisfy the contractor.
But before a contractor can just jump in and enforce a mechanic's lien, he or she first have to give the owner proper notice of that intent pursuant to the California Civil Code. This is done by serving the owner and any lenders with the notice, which must substantially comply with the form provided in Section 8202 of the Code. The contractor may also file this preliminary notice with the county recorder.
The preliminary notice paves the way for further legal action if necessary, including mechanic's liens and stop payment notices. But in many cases it may be the jolt of reality an owner needs to get serious and pay the contractor what is owed. For more information, an experienced California construction law attorney might be able to help.
Source: California Civil Code "Section 8200" accessed June 15, 2015