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Quote of the Day - Castles in the air - they are so easy to take refuge in. And so easy to build, too. - Henrik Ibsen
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Mechanic's Lien Invalid If No Work Done On Site

Be careful out there if you're a contractor providing design and planning services for a client but ultimately didn't end up building the project. You may think you can record a mechanic's lien.

Maybe you might have been able to before (how's that for hedging my bets?), but you can't anymore.

According to the California Second District Court of Appeal, it's a no-no.

D'Orsay hired Summit Builders to build a hotel in Long Beach.

Trouble is, it never got built.

Not even started. Not a shovel of dirt turned over. No building permit was ever issued.

But design work got done. Nearly $850,000 worth. Then, apparently, D'Orsay didn't pay because Summit Builders sued, and filed a mechanic's lien.

D'Orsay sought to get the mechanic's lien released because no improvement to the site was done. The Court ruled that because no work was done on the site itself, Summit couldn't file a mechanic's lien. Summit couldn't even force D'Orsay to post a bond (which would have been in excess of $1.2 million).

Ouch. Only design professionals can record those liens, not contractors.

Make sure you hold the right license.

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Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Friday, October 29, 2004 at 21:03 Comments Closed (0) |
 
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