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Discussion Starter · #1 ·
I'm getting burned on a project because the paperwork for the lien rights was not done properly. I have heard of services that will take care of all this, and continue with the follow up for a reativley small % of the contract. Any one know of such a service?

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Never hear of a lien service......

that can help you after you messed up your rights.

In California, we need to furnish the owner of the property a California Preliminary Notice within 20 days after starting the project only if we are a subcontractor. The prime contractor does not need to give this notice since the customer is aware they are signing the primary contract, but the prime contractor has to give a Notice To Owner that tells the customer the contractor can file a lien if he is not paid, so this is sort of similar to a Preliminary Notice with the exception that a Preliminary Notice is telling the customer that sub contractors are now involved in the project and the customer may not have been aware without the Preliminary Notice.

If a sub contractor or a material supplier does not give this notice they cannot file a lien, but anybody can file a lien whether they have the right or not, and if you don't have the right the worse that could (possibly) happen is you have to pay the property owner's attorney a few hundred dollars because he writes you a letter telling you the lien is not valid, and you had better remove it, but this has never happened to me, and I file liens on every customer who owes and does not pay within 60 to 90 days whether or not the lien is valid.

I think we have 120 days to file a lien after the project is completed.

Don't put much weight on a lien because a lien and one dollar won't get you a cup of coffee. About 1 in 20 customers will get scared and pay when you file a lien. Most people don't seem to care if they have a lien on their property because the only way you can execute a lien is to get a judgment from a court and this requires some type of lawsuit. Liens in California expire in 10 years, so if the customer doesn't plan on selling nor refinancing their property they don't care. I think liens are similar in most states and the major difference is the time periods.

I've taken many customers to court after filing liens and the judge never asked about nor mentioned an outstanding lien. I don't think the execution of a lien is handled during trials. I think the lien has to be exercised through the court at a separate hearing after you get a judgment and exercising the lien occurs when the judgment allows you to go after the assets. Not sure?

As for a lien service for before you are in trouble, all you need to do is give your customers the proper notices. When the customer does not pay it takes less than 10 minutes to fill out a lien form and send it to the county recorder with a check.

So,........don't put weight on a lien and move forward with a lawsuit.

But, don't ask me! Every contractor should have an attorney they feel comfortable enough to call and ask a few questions. I usually send my attorney $150 in the mail and then I call after he gets the check. When I call I tell him to bill me if their is a difference and he never does, but $150 can keep you out of a lot of trouble for the rest of your business life. Keep calling attorneys until you find the right one. I think you should always tell the attorney you are willing to pay for advice and many will even take credit cards over the phone.
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