Posts Tagged ‘Contractors’

5 Fast Facts About California Mechanic’s Liens

On January 19, 2009        

The Contractor’s Secret Weapon blog posted an article providing 5 fast facts about California Mechanic’s Liens.

Here they are:

1)    If you didn’t contract with the property owner, within 20 days after first providing materials or services to a project, you must deliver a Preliminary 20-Day Notice to their customer, the property owner, the general contractor and the construction lender.

2)    Failing to provide the Preliminary 20-Day Notice is grounds for disciplinary action by the Registrar of Contractors.

3)    Mechanics Liens must be recorded either:  (a) within 90 days from completion of project if Notice of Completion or Cessation is not recorded; or (b) within 30 days from completion of project if Notice of Completion or Cessation is recorded.  Prime contractors have 60 days.

4)    Your construction lien does not last forever.  You must file an action to foreclose on your lien within 90 days of its filing.

5)    If you don’t file an action to foreclose on your lien, the contractor must record a Mechanic’s Lien Release.   Failure to do so could subject the claimant to statutory penalties of up to $2000 for property owner’s legal costs in getting the lien removed.

Posted in:     Mechanic Liens  /  Tags: , , ,   /   8 Comments

Virginia – Strongest Liens of them All?

On December 29, 2008        

In the past, we’ve posted about the strength and effectiveness of construction liens.    Across the nation, construction or mechanics liens can be used as a powerful collections tool by contractors, suppliers and others working on construction projects.

The state of Virginia, however, has perhaps the most powerful mechanics liens in the nation.

In most circumstances, a mechanics lien will get resolved without the property being foreclosed or the property owner filing bankruptcy.   However, there are occasions (and in this economy, increasingly so) when a project falls apart, and those working on the jobsite find themselves waiting for proceeds to trickle down from foreclosure or bankruptcy proceedings.

In most states, a filed mechanics lien takes priority below the construction loan bank’s mortgage.   Further, the filing of bankruptcy usually defeats any lien rights.

In Virginia, however, the opposite is true.  A properly filed mechanics lien in Virginia will not get defeated in bankruptcy, and it will have priority over the construction loan bank.   Earlier filed mechanics liens have priority over later filed instruments.

We’ve posted in the past on why its important for contractors to lien unpaid construction projects.   This review of the powerful lien laws in Virginia stands as a reminder of how effective a mechanics lien can be, and why its important to make your claim timely & properly.

Posted in:     Mechanic Liens  /  Tags: , , , , , , , , ,   /   3 Comments

Explaining Louisiana Lien Law at AllBusiness.Com

On December 26, 2008        

AllBusiness.com, an online media and e-commerce company that operates one of the premier business sites on the Web, is a great tool for contractors.   They self-proclaim to help business professionals save time and money by addressing real-world business questions and presenting practical solutions.

As one of its resources, the website has re-published an article written by Lloyd N. Shields, one of New Orleans’ premiere construction attorneys.   The article, titled Mechanics Liens and Construction Bonds under Louisiana Law, offers a good discussion of Louisiana’s sometimes peculiar lien laws.

When doing work in a particular state – like Louisiana – it never hurts to spend time reviewing the overall lien laws in your area.   Understanding and following lien laws is important for your company to avoid bad collection situations, and is increasingly important in this penny-pinching economy.

It would be a prudent start to the new year to spend some time getting familiar with the lien laws in Louisiana.  You can read some basic information about Louisiana lien laws at the Construction Lien Blog here.   The allbusiness.com article is also a good resource.

Also, be sure to check out the Construction Industry Center at AllBusiness.Com.

Posted in:     Mechanic Liens, The Legal Corner  /  Tags: , , , , , , ,   /   2 Comments

Can Unlicensed Contractors Lien in California?

On December 26, 2008        

In California, like in every state, those who perform labor or provide materials to a construction project obtain a right to lien the property.  In fact, this lien right is even built into the California constitution.

However, every state’s lien laws has complex requirements.   A question that is frequently asked is whether an unlicensed contractor has the right to file a construction or mechanics lien.

Of course, the answer to this question varies state-by-state.  Further, one must remember that in most states, the fact that a person is unlicensed is not necessarily controlling as licenses are not required in every situation.

As it regards the state of California, the question was discussed in a legal column of PressBanner.com.  Gary Redenbacher says:

But what about unlicensed contractors? By law, unlicensed contractors are not entitled to be paid — period — for anything. Even if they do a perfect job and put $300,000 of materials into your home, they will be thrown out of court if they sue to get paid. Since unlicensed contractors cannot turn to the law to be paid, any lien they record is a false lien.

Contracting without a license is a misdemeanor. Recording a false lien in an attempt to get paid might just jump an unlicensed contractor from the frying pan into the fire.

One of the most critical mistakes any contractor can make when filing a construction lien is not being qualified to file one at all.  In California, its pretty clear that unlicensed contractors are completely without lien rights.  Elsewhere, if you’re performing construction work without a license, you should be extra-cautious before filing a construction lien, as you may not be qualified.

Posted in:     Mechanic Liens, The Legal Corner  /  Tags: , , , , , ,   /   1 Comment

Be Careful When Using Free Legal Forms

On December 26, 2008        

Gerard Simington with “FindAnAttorneyForMe.com” published an informative article that warns businesses about using free legal forms found on the internet.

The Internet has placed legal information and legal forms at our fingertips – and its easy to forget sometimes that the law is a very complicated subject, and legal forms are no exception.  While a legal form may seem simple on its face, the blanks can carry significant legal consequences.

It’s always great to hire an attorney to draft legal documents from scratch, or to “tweak” legal forms to fit your particular need.   The costs associated with legal counsel, however, are simply sometimes out of your business’ reach.

Legal Document preparation services like Zlien are perfect for these situations.  Our staffs of professionals are familiar with the forms that relate to your construction project, and we can help you draft & file your forms properly and avoid costly mistakes.

Posted in:     Construction News  /  Tags: , , , , , , , , , , , , , ,   /   1 Comment
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