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Re: Pay when Paid

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> From: Bill Allen, S.E. @ ALLEN DESIGNS <BAllenSE(--nospam--at)pacbell.net>
> To: seaoc(--nospam--at)seaoc.org
> Subject: Re: Pay when Paid
> Date: Monday, September 15, 1997 4:35 PM
> 
> Do you believe that this court ruling is applicable for design
> professionals (i.e., engineers contracting with their architectural
> clients)?
> 
> Regards,
> Bill Allen
> 
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I believe it is applicable. The basis for which the clause was struck down
remains the same in a contract between design professionals. 

Design professionals possess mechanics lien rights for the services
performed for a specific job. These lien rights are protected under
California Civil Code [what section - I have no idea]. The pay when paid
clause causes an indirect waiver of these lien rights in the event of
non-payment by the owner and is therefore void.

To establish and protect one's lien rights it is necessary to file a
California Preliminary Lien Notice for each project at the commencement of
work on the project. Note that this is not a lien itself but merely a
notice to the Architect and Owner that you are performing work related to a
specific project and that you are a person or entity who posses mechanics
lien rights on this project.

One down side is paperwork. Preliminary notices are required at the start
of contract work and various lien releases required as payments are
received. Plus, should it be necessary to actual lien a project, a fair
number of other forms get filed, resolution still takes  months, and you'll
probably still end up using legal counsel (although the cost of his
services become as a part of the claim).

Hey, but if the amount is small enough, you can sue in small claims court
and bypass all the mechanic lien heartburn.  I believe the claim ceiling is
being, or has been, raised.

Litigiously yours,

Brent Koch, P.E.
Willis Construction Company
San Juan Bautista, CA