California Mechanic's Lien Interest - Can a subcontractor charge interest on a mechanic's lien?
Summary: Subcontractors (and Original Contractors and Suppliers) may be entitled to charge interest on a mechanic's lien
QUESTION: A lien was filed against our property. Is the subcontractor able to attach interest to the lien until it is paid? Thank you, Scott
ANSWER: If the lien is foreclosed upon, the foreclosure award will include 10% interest on the principal amount. That's the only rule. Subcontractors often demand interest on their lien when asking for payment in satisfaction of the lien. It can be argued that the right to interest does not vest until a foreclosure award is entered after trial in a lawsuit to foreclose upon the lien, and that such a demand for interest in the payoff demand is inappropriate. However, the fact that interest would be added to the judgment may entitle the claimant to interest in addition to the payoff amount.
THANK YOU to Dave Barnier for the above response. :) Mr. Barnier is a practicing litigation attorney with Barker, Olmsted and Barnier in San Diego CA and can be reached at 619.682.4842.
The information in this article is based upon California law and is provided for general information, only. The information provided illustrates laws and legal principals in general. Any information or analysis presented in this article is intended solely to educate the reader on general issues. A comprehensive review of facts, documents, and applicable laws is always required before any attorney can competently provide any legal advice regarding any particular situation. In short: Please do not rely on any part of this article when analyzing any specific situation affecting you or your business. Please do retain an attorney to obtain professional advice for your specific situation.
Back to the top of this page: California Mechanic's Lien Interest
To: Frequently asked questions for California construction law answered by Attorney David J. Barnier
To: Ask Attorney Dave your California construction law question(s)
To the home page: Download Construction Forms