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What should a contractor do if a homeowner refuses to pay?

On Behalf of | Jan 31, 2020 | Construction Law

During a project like home construction, the owner of the property and the contractor sign binding legal contracts. This is to protect you if, for any reason, you find the property owner unwilling or unable to uphold your agreement.

If you find yourself in this situation, there is legal recourse. A solid contract will protect you. Your first step is to seek out a lawyer experienced in construction law, which is a complex practice area that requires a knowledgeable guide. This lawyer can help you file what’s called a mechanic’s lien on a homeowner’s property if you do not receive payment for your work.

What exactly is a mechanic’s lien?

A mechanic’s lien, sometimes called a property lien or a construction lien, is a document that gives you the right to seek unpaid compensation. If your client refuses to pay their bill, you can file this paperwork with the county recorder’s office to initiate a “hold” on the property. If your bill remains unpaid, foreclosure proceedings will ensue. This will also make it impossible for the homeowner to sell the property in question.

It’s important to note that a lien is not like a civil lawsuit in terms of the scope of damages. You can only file for the hard, physical costs of materials and labor. Emotional distress does not come into play.

What other options do you have?

As a contractor, you can also sue for breach of contract. The same lawyer can help you pursue this litigation as the mechanic’s liens.

Your contract and your business license give you rights in California. If a client refuses to abide by a contract, a mechanic’s liens might be an attractive option with which to pursue the payment you are entitled to.