The Labyrinth of Liens

[LS_8750]

We've all seen this, your survey does not benefit your client, in fact you end up discovering bad news for your client. He does not want to pay. Ugh!

Or, in another situation, I recently got a call from a real estate company asking for maps we may have produced for a parcel owner, former client, who now wishes to sell their property. I have a bad opinion of this real estate company, it seems they specialize in selling fantasies to unsuspecting people about building dream homes way up in the mountains where getting building permits is cost prohibitive (I'm talking about the Alabama of Santa Cruz County). I advised them, as their consulting engineer, of the CDF ingress/egress requirements related to their project, at the very beginning, even to the point of nearly convincing them not to hire me, but apparently they did not want to believe me. We ended up doing extensive topo work and engineering work for the current owners who later discovered they could not afford to build on the land because they would need to improve 3 miles of road in order for CDF to approve their permit application. I told them this from the very beginning.

They never paid in full, they owe us about $2k. My most recent invoice is dated January this year.

I figured somebody at some point would come asking for our maps and plans.

The only nail I can hang my hat on is that I have an ownership of documents clause that states the following:

"All documents produced by the Consultant under this agreement shall remain the property of the Consultant and may not be used by the Client for any other project without the written consent of the Consultant."

As for liens, it seems the design professional liens (Civil Code Sections 3081-3081.10) are limited to projects where building permits were obtained by the owner as a result of the professional's work. This never happened, we did exploratory and feasibilty work, and they abandoned the project.

As for mechanics liens, I don't have any experience with them, and don't really know where to begin, especially in a case such as this were it is not construction related.

I will get my $2k now that they want to sell the property and won't get anything from me until I get paid, but I am vulnerable and I am tired of worrying.

Can anybody spell out a "lien for dummies" procedure that I may implement in my own practice?

Cheers!
Clark E. Stoner, PE, PLS

[Dave Lindell]

First, you need to learn about Small Claims Court. They are your friend if you have a written contract. (And I know you do because it's the law.)

Attend a seminar about liens. My own lawyer, Wm. Crawford specializes in construction matters and puts on a very good seminar. I went years ago and can't remember the cost, but it was reasonable.

Timing is all important.

[pls7809]

Here is some info from just a couple of months ago...

http://www.californiasurveyors.org/clsa ... light=lien

[Jim Frame]

"First, you need to learn about Small Claims Court. They are your friend if you have a written contract."

I've been to Small Claims twice in 16 years. The first time it worked great, the guy reluctantly paid up after I got the judgment against him.

The last time, in 2006, didn't go so well. My contract -- for an ALTA on a hotel/restaurant site -- was signed by the individual who contacted me, but I neglected to get him to sign as a representative of the LLC that owned the property. When he failed to pay as agreed, I tried the usual phone calls and duplicate invoices for about 6 months, then filed suit. He was a no-show, and I got a default judgment. However, the judge refused to name the LLC in the judgment, even thought the individual is a principal in the LLC. The judgment was only against the individual.

An individual who saw me coming, it seems. He apparently owns nothing in his own name. I got a bill collector involved; he did some research and basically told me my only option is chalk it up to experience.

So, my judgment sits there gathering interest at 10% a year. However, absent a kneecapping, there's little prospect of it ever being turned into cash.

.

[LS_8750]

It seems to me the design professional lien does not benefit us in cases where no actual building permit was obtained. We all often find ourselves involved with surveys, engineering related, or purely boundary related that go nowhere near the actual obtaining of a building permit. So how does the design professional lien really benefit us?

Secondly, in the case of the mechanics lien, 90% of the time my contract is for services related to the design of improvements for private lands, and it is with the owner of the property being improved upon. I understand it is not required to file the 20 day preliminary notice when we are the original or prime contractor to the owner. Our wet signature on maps or plans is the final product and it is upon the exchange of this product when we generally collect final payment. I often send out maps and plans before receiving payment because of the relationship that develops over the course of the survey or design project. But when things go to hell, where does the mechanics lien fit into this?

I would like to put a little blurb together in my contracts that briefly describes our mechanics lien rights and our design professionals lien rights.

Does anybody have any input to share on this?

[Anthony Maffia]

This reminds me to add recovery of court costs to future contracts.