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Should I have the contractor obtain lien waivers from his employees and vendors?

The flooring contractor that installed my flooring left 30 holes (1.25" diameter; .25" deep) in the wooden stair skirt of my staircase without any prior notice that I would have to get these fixed. He threatened me with a pre - lien and I sent him the final payment (certified mail) - which I believe, never reached him and is being returned by the USPS. In order to ensure I'm fully protected, I'd like to know if I have to have the contractors employees and vendors complete lien waivers for amounts already paid and then have the owner do a Final lien waiver form when I provide the last payment (again) - EVEN I have to hire someone else to patch the holes he left in my walls. How can I make sure I'm protected?

1 reply

Jan 11, 2019

Good question. First, in California, mechanics lien rights are available to other parties beyond just the contractor who has signed an agreement with the owner. Thus, it's generally a good idea to obtain lien waivers from the direct contractor, their subcontractors, any lower-tiered subcontractors (i.e. subcontractors of other subcontractors, etc.), and any suppliers who provided materials to the project. Laborers also are entitled to file a mechanics lien in California - so, employees of a contractor or sub could potentially file a mechanics lien. However, unless there are very few employees, it might be impractical to obtain waivers from every single employee who provided work on the project. Still, where there's already a potential dispute at hand, if it's not unfeasible, obtaining lien waivers from laborers could be valuable. Further, in California, if an employee or sub-tier contractor does file a mechanics lien, the contractor will be responsible for the cost of defending the property owner under California Civil Code § 8470 ("In an action to enforce a lien for work provided to a contractor: (a) The contractor shall defend the action at the contractor’s own expense..."). Finally, when observing potential lien liability, it's important to remember a few things. For one, claimants who don't have a direct contract with the property owner will not be entitled to file a mechanics lien if they did not timely provide preliminary notice (except for laborers - they do not need to send notice). In California, this notice must be sent within 20 days of first furnishing labor and/or materials. Late notice can be effective, but will only work to preserve the right to lien for work provided 20 days before the notice and the work that follows the notice. That's a long-winded way of saying: If a party was required to send notice but failed to do so, they might have lost the ability to file a mechanics lien for their work - making a mechanics lien waiver potentially less important. For more on California's lien and notice rules, this resource should help: California Lien & Notice FAQs. For more on California preliminary notices, this is a great article: What Is a California 20-Day Preliminary Notice? And finally, when dealing with the threat of lien, this article may be of-use: I Just Received a Notice of Intent to Lien – What Should I Do Now?

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