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Work with experienced attorney to navigate issues surrounding construction liens, P.1

One of the unpleasant realities developers and contractors have to deal with on a fairly routine basis is construction liens. A construction lien is a security interest a contractor has in a property to ensure they are able to satisfy any unpaid bills.

Construction liens can be held by both general contractors and subcontractors, material suppliers, architects, interior designers, engineers, land surveyors—in a word, anybody who performs work or provides materials for the project. Whenever a lien holder is not paid in full, that party has the ability to force a sale of the property to pay for services and materials. That is what is happening right now in a construction project that has been subjected to a lien filing in Hollywood. 

The 15-story project was planned to feature a total of 247 condos, but is now in jeopardy due to various lawsuits. The general contractor in charge of heading up the project filed a construction lien against the developer of the H3 Hollywood Condominium for the entire project, and was awarded a lien judgment of $15.8 million last month. On top of the construction lien judgment the contractor won against the developer, 10 other companies have filed foreclosure lawsuits against the developer on construction liens and three construction buyers have filed lawsuits to get back their deposits. Clearly, the project is in trouble.

Construction liens don’t just pop up out of nowhere, of course. Typically, various problems arise, aren’t satisfactorily dealt with, somebody doesn’t get paid for one reason or another, and then there is the filing of a lien. For both property owners and those providing work or materials for a project, it is important to understand the rules and legal process surrounding construction liens in order to protect their rights. We’ll say more about this issue in our next post. 

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