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Volume XII, Number 231

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Want to File a Mechanics’ Lien in California? Here’s What You Can (and Can’t) Include

How can a contractor, subcontractor, or supplier secure payment for its work? One solution is to file a mechanics’ lien against a project’s property.

Lien laws vary widely from state to state and time to time because contractors and subcontractors frequently seek to change them – California is no exception. One particularly significant rule is that a subcontractor must send a pre-lien notice to the property’s owner, the general contractor, and the construction lender within 20 days after commencing work. Assuming the savvy sub or contractor files its pre-lien notice, a contractor or subcontractor will want to ask its legal advisor about what can be claimed in a lien notice.

In California, a lien claimant can recover for the reasonable value of its provided labor, services, equipment, or materials or the work’s contract price. Moreover, a lien’s amount can exceed the contract price – costs based on modification are allowed, via written agreement or a person’s word (and a firm handshake).

However, a lien claimant cannot include delay damages or attorneys’ fees.

In Lambert v. Superior Court, the California Court of Appeal held that delay damages are not allowed in a mechanics’ lien, whether or not the contract describes them as extra work. It reasoned that they are a form of “consequential damages” outside of a lien’s scope and allowing them would give claimants unfair leverage in arguing over who breached the contract. You might be thinking, “Aren’t overtime costs the same ‘hour’ as regular labor costs, though they are paid at time and a half?” While that’s true, California state and federal courts have squarely held that delay damages are not allowed in a mechanics’ lien.

Similarly, California courts don’t allow attorneys’ fees in a mechanics’ lien because they don’t add to the property’s value.

Still, if a lien claimant includes impermissible items, it doesn’t forfeit the entire lien (per the California Court of Appeal in Basic Modular Facilities, Inc. v. Ehsanipour). Instead, a court will reduce the lien to its proper amount, unless a claimant willfully includes items that it didn’t actually provide.

A mechanics’ lien is a useful tool for securing payment. But a claimant must save its delay damages and attorneys’ fees claim for a breach of contract action rather than a mechanics’ lien.

*Zachary Stewart is a 2L Law Student working as a Summer Associate at Bradley. He is not a licensed attorney.

© 2022 Bradley Arant Boult Cummings LLPNational Law Review, Volume XII, Number 180
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About this Author

E. Mabry Rogers Birmingham Construction Attorney Bradley
Partner

I took employment with Bradley in 1975, and I have been here ever since.

As you can see, if you visit the various sub-sites that surround this biography on the Bradley website, I have principally engaged in complex construction or procurement matters since that time. I started with the defense of Westinghouse in the uranium litigation arising from reactors built by Alabama Power Company and Tennessee Valley Authority. During that work, this firm developed strategies and techniques for managing complex litigation, which we have refined ever since...

205-521-8225
Michael W. Knapp Charlotte Construction Attorney Bradley
Partner

Michael Knapp is a Partner at Bradley Arant's Charlotte office. He enjoys a national practice which focuses primarily on construction, business and commercial disputes and financial services litigation. For the past several years, his focus has been on large scale public and private construction project disputes spread equally among owners, developers, engineers, architects, contractors and sureties. In recent years, Michael has worked on several high profile construction defect class action matters that involved claims of moisture intrusion and mold infestation....

704-338-6004
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