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Homeowners Beware—Make Sure That All Contractors, Sub-Contractors, and Material Supply Companies Are Paid

By May 2, 2012October 24th, 2018Construction Litigation Blog, Patty League
Patty League

Patty League

Homeowners who pay a contractor for construction work, including landscaping, may be held financially liable if the contractor fails to pay the subcontractors and material supply companies who also worked or provided product for your project.  According to California law, subcontractors and material suppliers who are not paid by the contractor are able to record a mechanics lien on the owner’s home. The general contractor (direct contractor) also has the right to record a mechanics lien on the property if they are not paid by the homeowner.  The worst case scenario is that a person’s home could be put up for auction by failing to make sure all contractors are paid for work performed on the owner’s property.

The  mechanics  lien law ensures, protects and secures payment to those who have supplied labor or materials that improve the property.  Since a person’s home is considered collateral against all transactions, mechanics liens can be recorded against it.

Homeowners often are stunned when they find out that although they paid the direct contractor in full, they may still end up owing subcontractors/material suppliers.  Fortunately for the subcontractor/material supplier, it appears that lien laws favor those who provide labor or materials to an improvement project rather than the unfortunate possibility of homeowners having to pay “twice” for the same work.

A homeowner should consult with a California construction law attorney before entering into a contract for repairs or improvements to their property.

Although there are several ways for homeowner(s) to prevent or protect themselves from a mechanics lien being recorded against their property, the primary concern should be to hire a reputable and California-licensed contractor with sound experience and integrity.  The status of a contractor’s license can be verified with the Contractors State License Board (CSLB).