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California. can an unlicensed contractor/subcontractor who did a job of $5000 put a lien on the property?

Los Angeles, CA |

1-i heard a contractor who does a job of more than few hundred dollars must have a license. is that true?
2-california. can an unlicensed contractor/subcontractor who did a job of $5000 put a lien on the property?
3-the property is commercial and the owner has a contract with the tenant, which states that the tenant must pay for all the interior expense. can the contractor still put a lien based on that?
4- what to do if there is going to be a lien?
5- would contractor be in trouble if required to have a license and not having one?
6- no written contract with tenant, can he still put a lien if no contract?

Attorney Answers 2

Posted

1. Yes, it's true if the contract or scope of work exceeds $500 in value;
2. Technically, he/she could record a lien but if they were not properly licensed at the time the work was performed, then the contractor's lien would be nvalid, they aren't entitled to recover any money and the lien could be expunged via petition to the court.
3. The owner cannot escape liability for the lien unless a proper Notice of Non-Responsibility was timely recorded and posted. Furthermore, if the rental agreement requires the tenant to make the improvements, even a notice of non-responsibility might not help the owner.
4. You can file a petition to expunge the lien.
5. Yes, you can file a complaint with the contractor's state license board.
6. Since this was commercial work, a written contract isn't necessarily required. If the contractor was licensed, then he likely could record a lien.

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Asker

Posted

thanks for your response. it was very informative. however can you clear #3. you said owner can not escape liability for lien unless a proper notice of non-responsibility was timely recorded and posted. but then it says if rental agreement required tenant to make improvements, even a notice might not help. can you clear if it does help the owner or not? -if we are forced to expunge the lien, can you do this based on contingency to do it and get your fees from the contractor?

Nichelo Michael Campbell

Nichelo Michael Campbell

Posted

A notice of non-responsibility is meaningless if the lease agreement between the owner of the property and the tenant who contracted with the contractor required the tenant to do the repairs or improvements. Example: a clause in the lease agreement requires the tenant to upgrade electrical, plumbing, stucco the exterior, etc. A subcontractor or contractor could still lien against the owner's interest because the work was required as part of the lease and recording and posting a notice of non-responsibility would not allow the owner a defense against a lien recorded against the owner's interest. As for expunging the lien, I can certainly help you with this but I do not work on a contingency basis on these types of matters. The statutes provide that you can recover your attorneys' fees if successful. You might also consider suing the contractor to recover all monies paid as unlicensed contractors are not entitled to any compensation, regardless of the quality of their work. Under a separate statute, if you are damaged by someone who's work requires a license and they don't have the requisite license, you can also recover treble damages up to $10,000.00 plus your fees and costs. If you were to obtain a favorable judgment against the contractor, you can send a copy to the Contractors State License Board and if it's not paid in 90 days, they will suspend the contractor (if he/she did in fact have a license).

Asker

Posted

in the lease agreement there was no specifications of what works had to be done. it was just a general clause that any interior work to be done by tenant as it is common in all commercial leases.

Nichelo Michael Campbell

Nichelo Michael Campbell

Posted

In that case, if the owner properly posted and recorded a notice of non-responsibility, the contractor, even if properly licensed, would not be able to foreclose on the ownership interest under a mechanics' lien, only the leasehold interest. Again, this assumes the contractor was in fact duly licensed. If not, then the entire lien is invalid.

Posted

The short answer to your question is: no. An unlicensed contractor does not have lien rights. In fact, an unlicensed contractor does not even have the right to collect payment on the contract even if all the work was performed. If a lien is placed on the property by an unlicensed contractor, a written demand to remove the lien should first be sent. If that doesn't work you may sue to have the lien removed and recover damages plus reasonable attorney fees.

No information you obtain from this answer is legal advice, nor is it intended to be. No attorney-client relationship is intended or formed between the questioner and answerer. You should consult an attorney for individualized advice regarding your specific situation.

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Asker

Posted

thanks. should we send him a letter before he files a lien to avoid further problems?

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