Construction Litigation


Many construction projects have mechanic’s liens taken out against them. Individuals and companies who work on construction projects or who supply materials may record liens against the property to ensure they are paid for work upon completion. If they are not paid, the lien holder may seek to foreclose. A much more common occurrence is for a property owner to negotiate and/or pay money owed once a foreclosure is possible. Commonly called construction liens, these liens to ensure payment by sub-contractors can burden real property or chattels (non-real property, i.e., non-real estate), but are usually, in construction projects, only taken against the real property that is the basis for the dispute. Construction liens also have serious limitations. First, construction liens, even in California, are not permitted on projects funded by the U.S. government. In cases involving the federal government where construction is taking place, other laws protect sub-contractors. Specifically, on federal projects, general contractors must be sufficiently bonded so the need for a lien will not arise.

Construction Liens

Even if a lien exists and the general contractor or owner did not fulfill his or her obligations, the lien holder cannot simply foreclose on the property in question; the lien must first be perfected. Perfecting a commercial lien requires several general actions to be effective: the parties must give notice to the owner of the property upon which the lien is held that a lien is in effect, the lien must be recorded, and a proper foreclosure action must also be filed. Mechanic’s liens or construction liens were first used in the United States in the early 19th century as a way to encourage business development and construction in Washington D.C. While they had been used in some form in jurisdictions outside of this country, their use in their current form comes from the northeastern party of the United States.

Stop Notices

This is another common tool used by parties who work on a construction project or who supply materials to it. It acts as a further protection for those people to guarantee payment for their goods and/or services. Stanley Lieber has extensive experience in construction litigation and has filed and defended many foreclosure actions concerning litigation and has filed and defended many foreclosure actions involving mechanic’s liens and stop notices. He was the lead attorney on one of the most important Stop Notice / banking industry cases: Familian Pipe and Supply vs. Imperial Bank, (in which he was successful in the underlying case and on appeal). The case has been cited in numerous stop notice litigation matters since. There are strict time and procedural statutory requirements in these types of cases. Many cases are won or lost because the attorney did or did not properly follow procedural rules. A litigator’s experience in this field is an important factor to consider when attempting to ensure a successful result. Stanley P. Lieber has been litigating construction cases for over 40 years.