In California’s busy construction industry, payment disputes between contractors, subcontractors, and property owners happen more often than many realize. Whether you’re a contractor seeking payment or a property owner facing a claim, it’s important to understand how these disputes unfold—and what options the law provides to protect your interests.
For contractors who haven’t been paid, the law offers powerful tools to pursue what’s owed. One of the most common is the mechanic’s lien. By filing a mechanic’s lien, contractors and subcontractors can claim a security interest in the property they improved. This creates pressure on the owner to resolve the payment issue, as the lien can complicate selling or refinancing the property.
Before filing a lien, California law requires strict compliance with notice rules. Contractors typically must serve a preliminary notice within 20 days of starting work or supplying materials. Missing this deadline can weaken or even eliminate lien rights. Once the lien is filed, the claimant has 90 days to enforce it through a lawsuit, unless the property owner records a notice of completion or cessation—then the period is shortened to just 60 days.
Beyond liens, contractors can sue directly for breach of contract or seek payment through stop notices if funds remain in the construction loan. Each of these options requires documentation: signed contracts, change orders, invoices, and communication records all become vital evidence if a dispute escalates to court.
On the other side, property owners defending against non-payment claims have several strategies. First, they can challenge whether the contractor followed the law correctly—such as timely service of preliminary notice or proper lien recording. Owners can also argue that work was defective, incomplete, or exceeded the agreed scope without authorization. In many cases, hiring an experienced construction attorney can help evaluate whether the claim is valid and negotiate a settlement to avoid litigation.
Timing is critical in these disputes. Contractors must act quickly to preserve lien rights, while property owners must respond promptly to avoid default judgments. Mediation or arbitration can also be faster and less expensive than court trials, and many contracts in California include clauses requiring alternative dispute resolution before litigation.
Sometimes, these claims involve complex overlapping issues—such as disputes between subcontractors and general contractors, or disagreements involving homeowner associations (HOAs). In those cases, it can help to consult a specialized attorney. For instance, if your claim is tied to work in a condominium or other HOA-governed property, working with an HOA attorney can bring valuable insight into the association’s unique rules and procedures.
In any construction payment dispute, clear, detailed documentation is your best defense—or your strongest evidence. Keep copies of signed contracts, daily reports, photographs of work performed, and written communications. These records not only help your lawyer build your case but can also encourage the other party to settle before litigation becomes necessary.
Ultimately, California law gives both contractors and property owners clear paths to sue—or defend—non-payment claims. The key to success lies in acting promptly, understanding the legal process, and working with qualified professionals to protect your interests every step of the way.
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