Q: I signed a contract for a solar/roofing however No work was done,I never signed any loan terms. Can they lien my house?
The salesperson was threatening me to pay 25%cancellation fee even tho it’s been 6’months ago. No permits was pulled, no labor/ work was officially done. All I got was a preliminary design of where they’re gonna put the panels. Also the loan approval was never activated and it expired since it’s been a while.
A: They may be able to record a design lien for the value of the design work. But the contractor has no right to a mechanics lien against your house if no labor or materials were furnished to the project. In particular, the contractor has no right to record a mechanics lien to cover a cancellation fee if no work was furnished. The contractor may have a contractual right to a cancellation fee. That would depend upon the terms of the contract that you signed, why the project was cancelled, and whether you have any defenses to the enforcement of the cancellation fee.
If no work was performed, no loan terms were signed, and the loan approval was not activated, it's unlikely that they can place a valid lien on your property. However, I recommend seeking legal advice to fully understand your situation and take appropriate steps to protect your rights under California law.
James L. Arrasmith
Founding Attorney and Chief Lawyer of The Law Offices of James L. Arrasmith in Sacramento
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