LEGAL MATTERS
Mechanic’s Liens— Little Mistakes, Big Problems.
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lmost every floor covering retailer, installer, or commercial contractor has run into problems with getting paid. If the retailer, installer, or contractor are subcontractors on the project, they cannot sue the property owner directly for the money because their contract is with the general contractor, not the owner. Mechanic’s liens provide a powerful tool to get payment for their work and products by allowing a lien to be placed on the property. The problem is that there are strict rules on how and when a mechanic’s lien can be filed.
STRICT ENFORCEMENT Jeffrey W. King Legal Counsel for the WFCA Jeffrey King has more than 35 years’ experience in complex litigation with a focus on contracts, employment, construction, antitrust, intellectual property and health care. He serves as legal counsel for WFCA and other trade associations, and is a LEED Accredited Professional. For more information, contact him at (561) 278-0035 or jeffw@jkingesq.com.
A mechanic’s lien is a legal claim against a property for labor and materials provided for improvements to the property. Since mechanic’s liens impact the title to the property, the courts have consistently limited mechanic’s liens and often will invalid a lien for any discrepancy. A recent case in California illustrates how easy it is to lose the rights to a mechanic’s lien. In Precision Framing Systems Inc., v. Henry LuzuriagaI, 39 Cal.App.5th 457 (2019), a framing subcontractor was hired to provide and install trusses for a veterinary hospital. The subcontractor hired another company to design and fabricate the trusses to be installed. The design was approved by the building’s architect. Once installed, the general contractor inspected the work and found the subcontractor’s “work was complete and fully in compliance with the plans and specifications.” The framing company, however, never received full payment, and it filed a mechanic’s lien for the amount due. An issue was raised regarding the trusses when the city inspector issued a correction notice that required some minor repairs. The framing company disputed that it or its subcontractor who designed and fabricated the trusses caused the issues. Nonetheless, the framing company and its subcontractor made the minor corrections that took only two to three hours to complete. The framing company sued to enforce its mechanic’s lien for the unpaid amount of its contract. The court ruled the lien was invalid. California law required that the lien be filed the earlier of ‘[n]inety days after completion of the work of improvement,” or [t]hirty days after the “the owner records a notice of completion or cessation.” Cal. Civil Code § 8414. The court found that the framing company filed its mechanic’s lien before completion of the work since it voluntarily made the corrections after filing the liens. A new mechanic’s lien could not be filed because more than 90 days had passed since the repairs were made. The California courts are not alone in strictly enforcing the requirements for mechanic’s liens. For example, a Court of Appeals in Kansas refused to enforce a mechanic’s lien because the contractor failed to verify that the contractor’s address
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