The League of California Homeowners

By Ken Willis

One of the worst nightmares any homeowner can imagine is to be confronted with a mechanics lien for materials or work after they have paid the prime contractor. Yes, this happens. Our association has dealt with one roofing contractor who failed to pay his supplier for sixteen roofing jobs all within 90 days. The supplier filed liens against all sixteen homeowners who had already paid the contractor the full amount. As it turned out, fourteen homeowners were stuck with having to pay for their roofing materials a second time.

Whether you are having a new roof put on the house, a swimming pool built or a new room addition, you need to know as much as you can about the contractor doing your job. This is why it is important for you to always ask a contractor for the name of his supplier(s), past customers and any other references that may be pertinent. It helps to call the supplier and verify that the contractor you are considering has a long-standing relationship with that supplier. This is because suppliers will not do business with a contractor for very long if he/she fails to pay for materials. Therefore, the longer the relationship between the contractor and the supplier, the better it is for you. Customer references are a help, but you need to speak with them yourself, don't assume they will be good just because they are on a list.

To avoid mechanics lien problems, we recommend that homeowners always obtain a copy of the receipt whenever the prime contractor comes to collect for his supplier or sub. You can also write two-party checks to your prime contractor. By this method, you can insure that the supplier or sub is fully aware that the prime contractor has been paid due to the fact that they too have to sign that check. This procedure usually allows for the supplier or sub to obtain immediate payment from the prime contractor. Once that occurs, you are pretty much out of the woods.

Another thing you can do – if you are a member of The League – is to call our office and get an Experian Business Credit Check for your prime contractor before you sign anything. It is doubtful that you will want to do business with someone who's credit record shows a history of bad credit, possible tax liens, judgements that are unpaid, etc. We can do that for you at a cost – about $30. This covers the price of the actual report and includes $5 for overhead, faxing and handling. It takes us about 24 to 48 hours to obtain a report for you.

In this month's edition of 'Homeowner,' we are featuring a special article on mechanics liens by James Acret, Esq., who has often been referred to as the "Dean of California Construction Law." Jim's article is fairly detailed, but if you are ever planning on doing any work with a contractor – you need to read it. Also, we are now offering to e-mail Jim's article to members of our association as sort of "primer" to be used by those who are about to engage a contractor. I'd suggest that you cut Jim's article out and keep it for future use as it is helpful to both consumers and contractors who are concerned about the issue of mechanics liens.

Meanwhile, if you ever have a question regarding your home improvement, you can always call the LCH office for answers or directions on how to resolve your dilemma. We are glad to help.