Are you considering filing a mechanics' lien in California?

To ensure payment for their work, a contractor, subcontractor, or supplier can file a mechanics' lien against the property of a project. Lien laws vary between states and are subject to change. In California, a subcontractor must send a pre-lien notice to the property owner, general contractor, and construction lender within 20 days of commencing work. If a pre-lien notice is filed, a contractor or subcontractor should consult their legal advisor to determine what can be claimed in a lien notice.

In California, a lien claimant can recover the reasonable value of labor, services, equipment, or materials provided or the contract price. The lien amount can exceed the contract price if there are costs based on modification, agreed upon in writing or verbally. However, a lien claimant cannot claim delay damages or attorneys' fees.

Delay damages are not allowed in a mechanics' lien in California, as held in the Lambert v. Superior Court case. Delay damages are seen as consequential damages outside of a lien's scope and would give claimants an unfair advantage in a contract dispute. Similarly, attorneys' fees cannot be claimed in a mechanics' lien as they do not add to the property's value.

If a lien claimant includes impermissible items, the lien will not be forfeited entirely. Instead, the court will reduce the lien to the appropriate amount, unless the claimant deliberately includes items not provided. While a mechanics' lien is a helpful tool for securing payment, claimants should pursue delay damages and attorneys' fees through a breach of contract action.