October 2016

News from Abdulaziz, Grossbart & Rudman

Abdulaziz, Grossbart & Rudman Newsletter
October 2016

We hope that you enjoy this edition of our Newsletter.
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The Staff At
Abdulaziz, Grossbart & Rudman
9 Differences Between Mechanic's Liens and Stop Payment Notices
By: Milene C. Apanian
Abdulaziz, Grossbart & Rudman

California statues provide for different types of collection remedies on construction projects. Below is a comparison of the Mechanic's Liens and Stop Payment Notices remedies, both of which are used when contractors, subcontractors, and/or material suppliers remain unpaid for work performed.

Mechanic's Liens
Stop Payment Notices
A Mechanic's Lien is an involuntary encumbrance on the chain of title and provides the lien claimant an ownership interest in the property that was improved. It binds the available value in the property, but it is not directed at an owner or an owner's other assets.
A Stop Payment Notice ties up a portion of the construction funds or money earmarked for the construction project. It does not attach to the property that was improved.
Available on private construction projects only.
Available on private and public construction projects.
A valid Preliminary 20 Day Notice is a prerequisite to a Mechanic's Lien action.
A valid Preliminary 20 Day Notice is a prerequisite to a Stop Payment Notice action. [Minor exceptions may apply to listed subcontractors on public projects]
A Mechanic's Lien must be recorded after all work is completed.
A Stop Payment Notice may be served during construction, it is not necessary to wait until completion.
A Mechanic's Lien is "perfected" by filing a lawsuit to foreclose upon the Mechanic's Lien.
A Stop Payment Notice is enforced by filing a lawsuit to "Enforce" the Stop Notice.
A Mechanic's Lien must be served on the project owner/contractor/lender and it must also be recorded in the County Recorder's office.
A Stop Payment Notice must only be served on the necessary parties such as the owner / contractor / subcontractor / lender . It is not necessary to record it.
A Mechanic's Lien expires within 90 days from the date it was recorded.
It is null and void, and unenforceable if not "perfected" within the 90 days.
A Stop Payment Notice does not expire in 90 days, but a lawsuit enforcing the Stop Payment Notice must be filed within the statutory deadline which is contingent on, and runs from the date the project is completed.
A Notice of Lis Pendens must be filed in court and recorded with the County Recorder's office after a Mechanic's Lien foreclosure action is filed.
A Notice of Commencement of Action must be filed in court after a Stop Payment Notice Action is filed.
It does not need to be recorded.
Attorney fees are not recoverable on a lawsuit foreclosing upon a Mechanic's Lien.
Attorney fees may be recoverable on a lawsuit enforcing a bonded Stop Payment Notice on a private job only.

For a detailed comparison of the various collection remedies or an understanding of the statutory requirements impacting your collections, you may contact Milene C. Apanian at mca@agrlaw.com or call 818-760-2000.

Which ghost is the best dancer? The Boogie Man!

Thank goodness for Halloween, all of a sudden, cobwebs in my house are decorations!

Where did the vampire open his savings account? At a blood bank!

What do you do when 50 zombies surround your house? Hope that it is Halloween!


September 8, 2016 CSLB #16-11

CSLB Urges Contractors to Beware of Scam License Calls
SACRAMENTO -The Contractors State License Board (CSLB) is warning licensees to beware of anyone calling them and claiming to be from CSLB, then informing them that they "qualify" for additional license classifications if they pay an extra fee. A recent licensee received such a call and reported it to CSLB, which confirmed that such an offer was bogus.

CSLB never calls licensees to ask for money over the phone, nor solicits credit card information. CSLB strongly encourages any other license holder who has received such a phone call to promptly report the incident to CSLB via email at social@cslb.ca.gov.

In this case, the contractor who recently obtained his license was called by a woman who claimed she was from CSLB and congratulated him on his new status. She then told him that he qualified for an additional license to install solar systems, and could add the C-46 classification for two payments of $200 each. She also said that because of his experience in the field, the contractor would qualify for favorable ratings from insurance companies.

The contractor, suspicious of the offer, called CSLB to report it. The call came from the Los Angeles area. CSLB suspects that the scammer(s) may be targeting newer contractors thought to be less familiar with licensing rules and how CSLB operates.

The above information was provided courtesy of the California Contractors' State License Board and we have their permission to redistribute it. You can visit the CSLB's website at www.cslb.ca.gov in order to subscribe to various alerts which would then be transmitted to you electronically.

These carpenters are working on a house. The one who's nailing down the timber keeps reaching into his nail pouch for nails and every time he pulls one out he either throws it over his shoulder or nails it in.

The other worker is intrigued by this and eventually asks him, "Why do you keep throwing those nails away?"

The first worker replies, "If I pull a nail out of my pouch and it's pointed toward me, then I throw it away because it's defective. If it's pointed toward the house, then I nail it in!"

The second blonde is amazed at the other guy's stupidity and yells at him, "You idiot! The nails pointed toward you aren't defective! They're for the other side of the house!"
Abdulaziz, Grossbart & Rudman
provides this information as a service to its friends and clients. This Newsletter is of a general nature and is not intended to be a substitute for legal advice. This Newsletter does not establish an attorney-client relationship with the reader. Since laws are ever changing, please contact an attorney before using any of the information contained within this Newsletter.
Abdulaziz, Grossbart & Rudman
P.O. Box 15458, North Hollywood, California 91606
(818) 760-2000; (818) 760-3908 (fax)
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10/20/16 - Getting Paid On Construction Projects and Construction Contracts
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