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My husband and I own a S corp, we are general contractors.

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We just finished interior renovations...
My husband and I own a S corp, we are general contractors. We just finished interior renovations on a restaurant. The owner is dragging his feet on our final payment. We contracted directly with him to make the improvements to the property. A landlord owns the building. How do we file a in this case? The restaurant owner still owes us 28k.
Submitted: 2 years ago.Category: Real Estate Law
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Answered in 29 minutes by:
2/24/2016
Real Estate Lawyer: RONB-ESQ, Lawyer replied 2 years ago
RONB-ESQ
RONB-ESQ, Lawyer
Category: Real Estate Law
Satisfied Customers: 357
Experience: Right of Way Manager at Access Midstream Partners, LP
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Hello my name is ***** ***** I am a licensed attorney. I welcome you to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. The question and response may be viewed by other parties as noted in JA’s terms of service. By continuing, you confirm that you understand and agree to these terms.

Could you tell me when you ceased work? Did this constitute completion of the project and did the owner get a CO (Certificate of Occupancy) at that time or was there more work left to be completed?

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Real Estate Lawyer: RONB-ESQ, Lawyer replied 2 years ago

I notice that it has been about 25 minutes since you posted so I recognize that you may be offline. Once you get online could you also answer this question. Did you have a written contract with the tenant? Do you know the owner's name/address? If I don't hear back from you in the next 10-15 minutes I will provide you a general answer, but if you reply with these answers it will help me provide you a more specific answer. Do note that even if I provide the general answer you are always able to reply here and clarify any wrong assumptions I made, etc in answering your question until you are fully satisfied that I have answered your question.

Regards,

Ron

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Real Estate Lawyer: RONB-ESQ, Lawyer replied 2 years ago

I am assuming that since you were unable to answer my questions then you might not be able to connect to the site since you posted your question. I will try to fully answer your question, but I will use some assumptions. Do note that even after I send my answer to you feel free to clarify any assumption I made that is wrong as that may affect my answer.

I am going to assume you have a written contract with the tenant. Since your contract is with the tenant and not the owner then under California law you will be deemed a sub-contractor and the rules that apply to sub-contractors will apply to you. You are required to provide a preliminary notice, by serving your notice on the owner of the property and in this case the tenant. You can serve this personally or mail it via Certified Mail Return Receipt Requested. http://www.leginfo.ca.gov/cgi-bin/displaycode?section=civ&group=08001-09000&file=8200-8216 You are required to have served this notice within 20 days of the beginning of the project. If you missed this you can still file one during your work, but any mechanic’s lien filed will only relate to work performed after the Preliminary notice was served on the parties.

In California you have very strict time limits that apply as to your time frame to record a mechanics lien. It is the earlier of these two: within 90 days of completion of work or no later than 30 days after the owner files notice of completion of the work, whichever of these is shorter. See specifically 8414 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=civ&group=08001-09000&file=8410-8424 . Section 8416 at same link as above details what must be included in any mechanic’s lien filed with the County Recorders office in the county where the property is located.

To then enforce your lien if you followed the steps above properly and provided a preliminary notice at the beginning of the project then you must file suit to foreclose within 90 days of filing the actual mechanic’s lien. If you fail to bring this legal action within that time then you are required to file a release of lien or you could be subject to the other side’s attorney’s fees if they have to take you to court to get you to file a release.

In your question you don’t mention anything about filing a preliminary notice or recording a mechanics lien. I am going to assume that you did not provide the preliminary notice to the owner and if so you are beyond the time frame to one file the mechanics lien or 2 you are beyond the time for file a foreclosure action to enforce your lien.

In that case you would simply file a breach of contract claim against the tenant. Just because you didn’t go through the mechanic’s lien process does not mean you lose your right to collect. The mechanic’s lien is setup so contractors don’t have to sue every time someone does not pay them and many times filing the mechanics lien will bring about payment. In this case I am assuming that is not an option.

You should consult with a local litigation attorney. You can find an attorney by using the search for attorney function at findlaw.com or avvo.com Most attorneys will meet with you for 30 minutes for free to go over your case. At any such meeting you want to have a copy of the contract signed by you and tenant.

In a breach of contract claim you are generally entitled to be made whole (paid what was owed and if you incurred any extra charges due to the other party’s breach then those damages as well) along with reasonable attorney’s fees required to file suit and collect any damages awarded by the Court. If you know that the restaurant has a certain amount of personal property inside such as table, chairs, refrigerators, etc then once you prevail in a lawsuit you can ask the Court to issue you a writ of execution and this will typically require the sheriff or constable to go to the property and look for any property they could take and sale to pay you back. If the property does not have a lien against it (your attorney can search for the lien and your attorney can take an oral deposition of defendant after judgment to have him/her identify all bank accounts, property, etc that is subject to sale to pay your judgment.

If you have any questions or concerns about my response, please reply and let me know. It's important that you are 100% satisfied with my courtesy and professionalism. Otherwise, please rate my service positively so I receive credit for the time I spent answering your question. If for some reason you don’t feel you can provide me positive feedback please reply and give me the opportunity to clarify my answer before giving me negative feedback.

Regards, Ron

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