We have a lot of reoccurring customers that have their solars panels removed and replaced. I'd like to know if have lien rights for this job.
1 reply
Oct 24, 2018
That's a good question, and lien rights can get tricky when it comes to solar projects. Sections 8400-8404 of the California Civil Code discuss exactly who is entitled to a California mechanics lien. Under § 8400, "A person that provides work authorized for a work of improvement..." is entitled to a mechanics lien right. Assuming work has been agreed to by the owner of the property, it's important to determine what exactly constitutes "work" and a "work of improvement" under the California Civil Code. Luckily, § 8048 and § 8050 of the California civil code provide some definitions. Under § 8048, “Work” means labor, service, equipment, or material provided to a work of improvement. Simple enough. § 8050 defines "work of improvement", and that definition is a little more involved. Under § 8050, a “Work of improvement” includes, but is not limited to: Construction, alteration, repair, demolition, or removal, in whole or in part, of, or addition to, a building, wharf, bridge, ditch, flume, aqueduct, well, tunnel, fence, machinery, railroad, or road..." Based on those definitions alone, it would seem that the installation or replacement of solar panels would constitute lienable work. After all, solar panel installation requires work typically associated with construction and alters the property to which it is attached. At the same time, in mechanics lien law, there's a general principle that, in order for lien rights to arise, the improvement to property must be "permanent". Not to go existential, but nothing is really permanent - the term refers more to the intention of the work and the level of attachment it has to the property. i.e. In order to be considered "permanent", a work would need a significant level of attachment to the property, and the intention would likely need to be that the improvement would remain attached for a significant amount of time. Considering solar panels are often constructed and installed to be replaced after some amount of time, there's a fair question as to whether they should be considered "permanent" improvements. On the other hand, solar panel installations involve a very high level of attachment to the property and are typically intended to remain for a long amount of time. While there are lingering questions about whether solar panels constitute a "permanent" improvement to property, under California's Civil Code, solar panel installation and replacement would appear to give rise to lien rights.