Mechanics Liens Apply to Demolition Work

July 14, 2009

In United Rentals Northwest, Inc. v. Snider Lumber Products, Inc., 174 Cal.App. 4th 1479 (2009), California's Fifth Appellate District recently held that an equipment lessor who provided equipment used to demolish lumber drying kilns at a sawmill in Tuolumne County could utilize the mechanics' lien remedy. The Mechanics Lien Law provides that lessors of equipment used in a "work of improvement" have a lien upon the property for the value of the use of the equipment. (Civil Code Sec. 3110.) In turn, a "work of improvement" is defined to include "the demolition of buildings and the removal of buildings." (Civil Code Sec. 3106). The Mechanics Lien Law does not impose any requirement that the work actually improve the real property. The court pointed out that since the owners hired contractors to remove buildings this presumably meant it was of value to the owners that the buildings be demolished.

While the opinion merely applies the clear statutory language, it is noteworthy as it is probably inconsistent with the layperson's expectations that a mechanic's lien arises from enhancing the value of the owner's property. That is not necessarily the case. While that is the policy underlying the mechanics lien remedy, the courts do not examine each lien claimant's contributions to determine whether they actually increased the property's value.