SMALL CLAIMS COURTS AND YOUR MECHANICS LIENS
We’ve all heard how expensive it is to file a lawsuit in the California superior courts. On many occasions, a contractor may have a mechanics lien for less than $5,000 and think that he or she can save money by filing a lawsuit in the California small claims courts to perfect that lien. Think again. Unfortunately, no matter how small the amount of your mechanics lien, your only recourse to perfect a lien is to file a lawsuit in superior court.
Small Claims Court Option
You can, however, file a Small Claims Court Construction claim for up to $5,000 against a contractor in small claims court. Small claims court is more informal—no attorneys are allowed—so make sure your ducks are in a row as far as identifying the proper defendants. In addition to naming the contractor(s) who owe you money, you also may name the contractor’s surety bond company as a defendant. Always check with the Contractors State License Board (CSLB) to determine the surety company that carried the bond at the time the damages occurred, not necessarily the contractor’s current surety company. This information can be found on the CSLB Website under the contractor’s License Detail/Bonding area. If the registrar holds a cash deposit, you also must name the registrar as a defendant in your action.
Once you obtain a judgment against the contractor, send the Judgment Unit Section of the CSLB a letter with a copy of your judgment. The CSLB does not look favorably at a contractor who has a judgment against him or her. The CSLB will allow a contractor to make “good” on an unsatisfied judgment within 90 days of the judgment being entered on the contractor’s license record. If it is not paid within that time period, that contractor’s license is suspended until the judgment is paid.
Keep in mind that the CSLB will not suspend a contractor’s license if a contractor has filed for bankruptcy and claims that he or she cannot pay the judgment. If this happens to you, collecting from that contractor’s license bond surety may be your only alternative.
Click here to download a Consumer Guide to Filing a Small Claims Court Construction Claim.