Full question:
We hired a contractor to do work for our business. We secured an SBA loan and received a quote from him as required by the bank. We had known him previously, and no contract was signed. We have paid him 50% more than his original quote and the project has taken four months longer than promised. His last bill we refused to pay as we did not see that he had done any work justifying the amount and was 25% of the original cost for the project. As I said we had already paid 50% above the original quote. He then went on vacation and we had to meet with the various inspectors to get passed as he was not around. He has not contacted us since he left for vacation which was 4 weeks ago. I now need an unconditional waiver signed for the property company and can not get a response from him. Can he put a lien against us? We have overpaid on his original quote and he has doubled the original end time that was promised on the job so I would hope not. What are my options? I don't want to sue him, I just want this waiver signed so I can move on with my business.
- Category: Contractors
- Subcategory: Construction Liens
- Date:
- State: California
Answer:
A construction lien is possible if a person or company has provided permitted labor and/or materials to real property that have gone unpaid. In California, there is a mandatory process to follow in order to create a valid lien. An original contractor must record his claim of lien after he completes his contract and before the expiration of (a) ninety (90) days after completion of the work if no notice of completion or notice of cessation is recorded, or (b) sixty (60) days after the notice of completion or notice of cessation is recorded. After that time frame has passed, he cannot enforce a lien.
The process is predicated on the assumption that there was a contract between the contractor and the property owner. If there was a written contract, it should provide for what would happen in the case of default by either party. A quote is not a contract unless it was signed by the other party (creating an acceptance of the quote which can also be called an offer). Any work outside a written contract may not be covered by terms of that contract and thus may become a separate verbal contract.
Unfortunately, there is no legal remedy to force a contractor to sign a waiver of his rights to payment (lien).
Enforcement of a contract by the homeowner would require proof of the terms, including the work that was to be performed and the total amounts that were to be paid.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
