Planning to build a home or remodel your existing home?
The Law Offices of Page, Lobo, Costales and Preston come across many construction cases where the contractor either does not have a license or the license he or she carries is out of date.
It is important to know how to hire a contractorwhen starting a construction project at your home. Here are some tips to choosing a contractor:
Make sure he or she is currently state licensed in your area. Has the construction company paid its employees legally and carry workers’ compensation, property damage and liability insurance? You should also find out how long he or she has been in business along with a list of references you can contact.
Does the contractor have a work crew or do they subcontract the work? Protect yourself from a mechanics lien by asking the contractor, subcontractors and suppliers for lien releases or waivers upon each payment.
Ask if the contractor can supply you with a fixed start and completion date included in a formal written agreement. If you aren’t normally onsite during the project it is a good idea to check in regularly to make sure everything is coming along.
Ask for an itemized price estimate from each potential contractor when getting bids. Examine each carefully paying attention to those that seem too high or too low. Lower bids may mean you will get a hasty job that won’t leave you with a quality finished product. Remember, in most cases you get what you pay for.
Ask the contractor for a schedule of the work from start to finish. If you want regular progress reports, ask for them in writing.
Don’t let your payments get ahead of the work. We recommend paying 10 percent down before they start the project. If it is a stable company they won’t need a large amount of money to pay for materials or overhead.
If you have questions about a mechaincs lien or construction issues, contact Jonathon Preston with Page, Lobo, Costales and Preston APC.
What to do if a mechanics lien has been filed on your property.
The first thing you should do is determine if it is a valid lien. If work has not been completed or supplies were not included in the plans and contracts, the lien may be void.
If an invalid mechanics lien was filed it can make it difficult or impossible to sell, refinance or obtain a line of credit on your property. However if the contractor, subcontractor, laborer, or material supplier fail to follow any of the specific time frames, your lien may be invalid and you may petition the court to remove the lien.
Talk with our office to find out if your lien is valid. Was the preliminary notice given to you within the specific time frames? The subcontractor or supplier will have 20 days after delivering materials or beginning work to serve a preliminary notice. If it is late, lien rights are lost on work done or materials delivered more than 20 days before the notice.
Check with your local superior court to make sure a timely lien foreclosure action was filed by the subcontractor or material supplier. A lien foreclosure action is a lawsuit to foreclose the mechanics lien. The lien claimant must file a lien foreclosure action within 90 days of the date that he or she recorded the mechanics lien.
The market is improving and we are starting to see more new construction start to go up.
When more construction starts, we see a lot more cases pop up that have to do with legal issues at construction sites.
Page, Lobo, Costales and Preston would like to share with our readers some helpful tips to avoiding a construction lawsuit:
View changes in the original constructionplan as an opportunity for mutual benefit. We all know changes in a construction project are inevitable, whether unforeseen or initiated by the owner. In a flexible environment with communication as a top priority, dealing with unexpected change can be a group effort, and open communication is key.
Make sure goals are set in place to meet the project’s schedule and budget. When faced with an issue, gather as much information as possible about the given subject before proceeding.
Hire a constructionmanager to better articulate the owner’s goals and facilitate the contractor’s work. A qualified construction manager knows what to look for during your project’s design in order to avoid legal action later.
Build a relationship with your project team and make trust and communication your biggest asset. During the bidding period you can test each partner’s knowledge and willingness to work together.
Do you have questions about a legal matter for a construction project you are involved with? Please call our offices at 951-461-2500.
If a mechanics lien is filed on your property, the first thing you should do is determine if it is a valid lien. If work has not been completed or supplies were not included in the plans and contracts, the lien may be void.
If an invalid lienwas filed it can make it difficult or impossible to sell, refinance or obtain a line of credit on your property. However if the contractor, subcontractor, laborer, or material supplier fail to follow any of the specific time frames, your lien may be invalid and you may petition the court to remove the lien.
Talk with our office to find out if your lienis valid. Was the preliminary notice given to you within the specific time frames? The subcontractor or supplier will have 20 days after delivering materials or beginning work to serve a preliminary notice. If it is late, lien rights are lost on work done or materials delivered more than 20 days before the notice.
Check with your local superior court to make sure a timely lienforeclosure action was filed by the subcontractor or material supplier. A lien foreclosure action is a lawsuit to foreclose the mechanics lien. The lien claimant must file a lien foreclosure action within 90 days of the date that he or she recorded the mechanics lien.
If construction is being performed on government owned or public property, a stop notice is used.
Mechanics liens are not available to secure payment for labor and materials with government owned or public property construction. In order to notify the owner or government agency a subcontractor has not been paid for work performed, a stop notice is used.
A stop notice will provide the claimant with certain enforceable rights directly against un-issued construction loan proceeds. If a timely and properly served stop notice is presented, the public entity being served must set aside sufficient funds due to the contractor to satisfy the claim. They also must pay interest and provide for the public entity’s reasonable cost of litigation.
Stop notices are available for private projects however the funds must be held by a construction lender or owner. A mechanics lien attaches to the real property, while the stop notice attaches to the funds held by the lender or owner.
Specific action items, including procedures that must be performed prior to commencement of work, are required to create, preserve and enforce a mechanics lien or stop notice. It is important to understand proper procedures when it comes to stop notices and mechanics liens. Please call our offices at 951-461-2500 for a free 30 minute consultation.
With new construction popping up, mechanics liens are starting to become more prevalent.
Page, Lobo, Costales and Preston would like to share some helpful tips to avoiding a mechanics lien for any projects you are involved with.
One of the most annoying things that can happen to an association is to have a mechanic’s lien filed against association property. The lien, until the lienor is paid, can block the sale of every unit in the association.
An association may pay a contractor in full and still have a mechanic’s lien filed if the contractor failed to pay one of his suppliers or subcontractors. It is important for the manager and the association to make sure the language in the contract precludes the filing of a mechanic’s lien against the association unless the association has failed to pay the contractor for one reason or another.
The following are steps to avoiding a mechanics lien:
When choosing your contractor, make sure to hire only licensed contractors and make sure to verify their contractor’s license status. When your contractor hires subcontractors, make sure they are licensed. It is also a good idea to check your prime contractor’s reputation for paying its subcontractors and material suppliers. Before starting construction, get a list of all subcontractors, laborers and material suppliers to be used by your prime contractor.
When writing up your contract, come up with a payment schedule which states when specific phases of the work both start and end along with the end price for each segment.
Make sure to keep track of all paperwork. A preliminary notice is required from subcontractors and suppliers if there is a chance they may need to file a mechanic’s lien. Within the notice, it will state that the subcontractor or supplier has provided, or will provide, goods and services to improve your property and file a lien claim if they are not paid. If your subcontractors and suppliers do not provide you with this notice, they lose the right to file a lien. This notice however is not required from laborers or the direct contractor.
One of the best ways to prevent liens and ensure subcontractors and suppliers are paid is to pay with joint checks. This means both parties must endorse the check. When writing your checks, first compare the contractor’s material or labor bill to the schedule of payments in your contract and Preliminary Notices and make sure the work was done as described.
It is also a good idea to get a signed conditional release from possible mechanic’s lien claimants before making your payment. After you pay, the contractor should provide you with an unconditional release, signed by each of the claimants paid for the portion of the work being released. Ensure the actual claimant signs the unconditional release. Until the unconditional releases are signed for the previous payments, you may withhold the next payment.
After the work is completed, file a Notice of Completion which will reduce the amount of time a contractor, subcontractor, laborer or materials supplier has to record a claim.
A mechanics lien is a “hold” against your property, filed by an unpaid contractor, subcontractor, laborer, or material supplier, and is recorded with the county recorder’s office.
If the lien is unpaid, the property can go into foreclosure, forcing the sale of the property in exchange of compensation.
In order to avoid a mechanics lien, follow these tips:
Choose your contractor carefully. It is important to hire only licensed contractors and make sure they hire only licensed subcontractors. It is also a good idea to check your contractor’s reputation for paying subcontractors and material suppliers.
Double check your written contract. Your contract should include a schedule that states when specific phases of the work start and end. The contract should also identify subcontractors or labors for each phase as well as the material suppliers for each phase.
Save your preliminary notices. A preliminary notice is required from subcontractors and suppliers if there is a chance they may need to file a lien. It will state the subcontractor or supplier has or will provide the goods and services to improve your property and could file a lien claim if they are not paid. If a subcontractor does not provide you with a notice, they lose the right to file a lien.
Issue joint checks to your contractor and suppliers/subcontractors. This will ensure the subcontractors and suppliers are paid. Make sure the work has been done as described.
Fill out a notice of completion with the county recorder’s office after the work has been completed. This will reduce the amount of time a contractor, subcontractor, laborer or material supplier has to record a claim.
Do you have questions on construction law or mechanics liens? Please call us, 951-461-2500, and we’d be happy to help!