We shipped materials to a job site for a contractor. It's our understanding that the contractor was terminated, the materials were not installed, and the contractor was told to take his materials and leave. We're curious about our mechanics lien rights in this sitution.
Parties who deliver materials used in the construction of a work of improvement are generally provided mechancis lien protection. However, in order for material suppliers to gain mechanics lien protection, it is generally the case that those materials must be incorporated in the project. This means that the matrials are usually required to be used in the project to give rise to mechanics lien protection. This makes sense, since a mechanics lien is an encumbrance on property that arises from the improvement to that property.
In California, material suppliers are provided a certain presumption, however. If the delivery of materials to a particular site can be proved, the supplier is entitled to a presumption that the materials were used with respect to an improvement on that site. Consolidated Elec. Distribs., Inc. v Kirkham, Chacon & Kirkham, Inc. (1971). However, if it specifically known that the materials were not incorporated into the improvement, the presumption may not be enought to result in an enforceable mechanics lien.
Additionally, California is not a state in which there is specific protection for suppliers of "specially fabricated materials." In some states parties who supply materials that are specifically related to a particular project and not fit for use in other projects, are entitled to mechanics lien protection even if the materials were not incorporated in the work of improvement.
If a mechanics lien is available - the general requirements for a CA mechanics lien still apply. Preliminary notice must be provided, and all the general deadline and formal requirements must be met.
In the event a mechanics lien is not available, recovery is likely best pursued through the party who purhased the materials - whether through breach of contract, failure to comply with prompt payment requirements , or some other cause of action.
Nate is spot on. There may be an exception where the materials were installed, and then removed or destroyed --- but that does not sound like what has happened here. Your remedy lies with your customer through breach of contract or unjust enrichmen.
---CN
If the materials were not actually installed in the project, then you have no lien rights. Materials must be physically incorporated into the project’s property for lien rights.
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