What are the remedies for failure to pay for construction work?

In California, there are several legal remedies available for contractors or subcontractors who fail to receive payment for construction work performed. The first remedy is to file a mechanics lien or a stop notice. A mechanics lien is a type of lien granted by law to contractors or suppliers of labor or materials in connection with the improvement of real property. In California, the lien must be recorded in the county recorder’s office, and when it is, it will prevent the property owner from selling or refinancing the property until the lien is paid in full. A stop notice is a notice sent to the property owner by a contractor or subcontractor which essentially stops the flow of funds from the owner to the contractor who has failed to pay the subcontractor. The second remedy is to file an action in court. In California, a breach of contract action may be filed in Superior Court by the contractor or subcontractor who did not receive payment. The contractor can seek damages and an injunction to force the property owner to pay the money owed. The third remedy is to institute mediation or arbitration. Mediation and arbitration are processes by which the parties agree to meet with a neutral third party who facilitates the resolution of the dispute. This is often a quicker and less expensive alternative to filing a lawsuit. In summary, if a contractor or subcontractor in California is not paid for construction work performed, the contractor may pursue a mechanics lien, file a breach of contract action in court, or mediate or arbitrate the dispute.

What are the remedies for failure to pay for construction work?

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