CRITICAL WARNING: Mechanics Liens
Even if you paid your contractor in full, subcontractors and material suppliers can file mechanics liens against your property if the contractor didn't pay them. This means you could pay twice for the same work.
If you've received a "Preliminary Notice" from a subcontractor or supplier, they have the right to lien your property even though you paid the general contractor. California law (Civil Code 8800-8848) governs these procedures.
- Track all preliminary notices you receive - they're warning signs
- Demand lien releases from the contractor before making progress payments
- Consider paying subcontractors directly with joint checks
- If liens are filed, you may need to pay the subs directly or bond around the lien
⚖ California Laws That Protect You
California has strong contractor licensing laws. Abandonment and diversion of funds are serious violations that can result in license suspension, bond claims, and civil liability.
Business & Professions Code 7107 - Abandonment = License Discipline
Abandoning a construction project without legal excuse is grounds for disciplinary action against the contractor's license. The CSLB can suspend or revoke the license, making it easier for you to recover damages.
Business & Professions Code 7113 - Diversion of Funds
It's illegal for a contractor to divert funds received for your project to other purposes. If they took your deposit or progress payment and used it elsewhere (like paying debts on other jobs), this is a separate violation that can result in criminal charges and personal liability.
Civil Code 3300 - Contract Damages
You're entitled to recover all damages that flow naturally from the contractor's breach, including the cost to complete the project, additional expenses caused by delay, and consequential damages like temporary housing costs.
Civil Code 8800-8848 - Mechanics Lien Release Procedures
These sections govern lien releases and your right to demand proof that subcontractors and suppliers have been paid. Always require conditional and unconditional lien releases tied to your payments.
CSLB Contractor Bond - Up to $25,000
Every licensed California contractor must maintain a $25,000 contractor's license bond. If your contractor abandoned your project, you can file a claim against this bond to recover your losses - even if the contractor has no other assets.
Verify the License First
Go to cslb.ca.gov and look up your contractor's license. Confirm it's active and check if there are existing complaints. If they're unlicensed, you have additional remedies (see our Unlicensed Contractor page).
🚧 Common Abandonment Scenarios
If any of these situations describe your experience, you likely have grounds for a demand letter and CSLB complaint:
🚫 Contractor Disappeared Mid-Project
Work stopped without notice or explanation. Contractor won't return calls. Project is partially complete with exposed framing, missing fixtures, or incomplete systems.
💰 Took Deposit/Payment and Never Returned
Contractor collected a large deposit or progress payment, started little or no work, then vanished. This may also constitute "diversion of funds" - a criminal offense.
⚠ Left Project in Dangerous/Unfinished Condition
Site left unsafe - open trenches, exposed wiring, missing railings, incomplete structural work. You're facing additional costs to secure the property and pass inspections.
📋 Subcontractors Filing Liens Despite Contractor Being Paid
You paid the general contractor but now subcontractors and suppliers are demanding payment or filing mechanics liens. The contractor took your money but didn't pay his subs.
💰 What You Can Recover
California law allows you to recover all damages caused by the contractor's abandonment:
| Damage Type | Description | Typical Amount |
|---|---|---|
| Cost to Complete | Difference between what a new contractor charges to finish and what remained on your original contract | $5,000 - $100,000+ |
| Unearned Deposits/Payments | Any money paid for work that was never performed | $2,000 - $50,000+ |
| Delay Damages | Additional rent, hotel costs, storage fees, extended mortgage payments while waiting for completion | $1,000 - $20,000+ |
| Mechanics Lien Defense | Costs to defend against or pay off liens filed by unpaid subcontractors/suppliers | $2,000 - $50,000+ |
| CSLB Bond Claim | Claim against contractor's license bond - guaranteed recovery source | Up to $25,000 |
| Permit/Inspection Costs | Additional permit fees, re-inspection costs, correction work to pass inspections | $500 - $5,000 |
Get Multiple Estimates
Before sending your demand letter, get at least 2-3 written estimates from licensed contractors to complete the abandoned work. This establishes your "cost to complete" damages with solid documentation.
📝 Demand Letter Template
Send this letter via certified mail with return receipt requested. Keep a copy for your records. This letter serves as evidence for your CSLB complaint and potential lawsuit.
DEMAND FOR COMPENSATION - ABANDONED CONSTRUCTION PROJECT
[Your Name]
[Your Address]
[City, CA ZIP]
[Phone]
[Email]
[Date]
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
[Contractor Name / Company Name]
[Contractor License Number]
[Company Address]
[City, CA ZIP]
Re: DEMAND FOR COMPLETION OR REFUND - ABANDONED PROJECT
Project Address: [Property Address]
Contract Date: [Date Contract Signed]
License Number: [Contractor License #]
Dear [Contractor Name]:
I am writing to formally demand completion of the construction project at [Property Address] or, alternatively, immediate refund of all payments made for work not performed, plus damages.
BACKGROUND:
On [Contract Date], we entered into a written contract for [describe project - e.g., "kitchen remodel," "room addition," "bathroom renovation"] at the above property. The total contract price was $[Contract Amount].
PAYMENTS MADE:
To date, I have paid you the following amounts:
- Initial deposit on [Date]: $[Amount]
- Progress payment on [Date]: $[Amount]
- [Additional payments if any]: $[Amount]
Total Paid: $[Total Amount Paid]
WORK COMPLETED:
Before you abandoned the project on or about [Date of Last Work], the following work was completed:
[List work completed - e.g., "Demo completed, rough framing 50% complete, no plumbing, no electrical, no drywall"]
The following work remains incomplete:
[List incomplete work per contract]
ABANDONMENT:
Since [Date], you have failed to appear at the job site, failed to respond to my phone calls and messages, and failed to provide any explanation for the work stoppage. Your last communication was on [Date and nature of last contact].
This constitutes abandonment of the project in violation of California Business & Professions Code Section 7107.
DAMAGES:
As a result of your abandonment, I have suffered the following damages:
Value of work remaining on contract: $[Amount]
Cost to complete (per estimates attached): $[Amount]
COST TO COMPLETE DAMAGES (difference): $[Amount]
Unearned payments (paid but work not done): $[Amount]
Delay damages (additional housing/storage): $[Amount]
Permit/inspection correction costs: $[Amount]
[Other documented damages]: $[Amount]
TOTAL DAMAGES: $[Total Amount]
DEMAND:
I hereby demand that within fourteen (14) days of this letter you either:
1. Return to the project site and complete all remaining work per our contract; OR
2. Refund $[Total Damages] to compensate me for all damages caused by your abandonment.
CONSEQUENCES OF NON-COMPLIANCE:
If I do not receive a satisfactory response within 14 days, I will:
1. File a formal complaint with the Contractors State License Board (CSLB) for abandonment under B&P Code 7107 and diversion of funds under B&P Code 7113;
2. File a claim against your contractor's license bond for up to $25,000;
3. Commence civil litigation for breach of contract, negligence, and violation of the Contractors State License Law, in which I will seek the above damages plus attorney fees, costs, and any other relief available under law.
Your license number [License #] will be referenced in all filings.
Please contact me immediately at [Phone/Email] to resolve this matter.
Sincerely,
_______________________________
[Your Signature]
[Your Printed Name]
Enclosures:
- Copy of signed contract dated [Date]
- Payment records/cancelled checks
- Photographs of incomplete work
- Written estimates from replacement contractors
- Copy of building permit (if applicable)
- Communications/text messages with contractor
cc: Contractors State License Board
[Your attorney, if applicable]
🖩 Contractor Abandonment Damages Calculator
Use this interactive calculator to estimate potential damages in your case. Enter your information below to get an estimate of recoverable damages.
📈 Estimated Damages Breakdown
Direct Damages
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Consequential Damages
$0
Emotional Distress (Est.)
$0
Statutory Penalties (Est.)
$0
TOTAL ESTIMATED DAMAGES
$0
Disclaimer: This calculator provides rough estimates for educational purposes only and does not constitute legal advice. Actual damages vary significantly based on specific facts, evidence strength, and many other factors. Consult with a qualified California attorney for an accurate case evaluation.
📋 Evidence to Gather Before Sending
- Written contract - The signed agreement showing scope of work, price, and payment schedule
- Payment records - Cancelled checks, bank statements, credit card receipts, any proof of payment
- Photos of work progress - Before, during, and current state showing incomplete work
- Communications - Text messages, emails, voicemails with contractor (including unanswered attempts)
- Permit records - Building permits, inspection reports, any failed inspections
- New contractor estimates - At least 2-3 written estimates to complete the abandoned work
- CSLB license lookup - Print the contractor's license status from cslb.ca.gov
- Preliminary notices received - Any notices from subcontractors or suppliers
Document the Site Condition
Take detailed photos and video of the current state of the project. If there are safety hazards, document them. This evidence supports your damages claim and may show violation of building codes.
📅 What Happens After You Send the Letter
Days 1-7: Allow for Delivery
Certified mail takes 3-7 days. The clock starts when they receive it (or refuse delivery - refusal counts as receipt).
Days 7-14: Response Period
Contractor may respond with offer to return, explanation, or settlement offer. Many contractors ignore demand letters - be prepared.
Day 15+: File CSLB Complaint
If no satisfactory response, file complaint at cslb.ca.gov. Include copy of demand letter. CSLB investigates and can discipline license.
File Bond Claim
Submit claim against contractor's $25,000 license bond. CSLB can provide bond company information. Bond claims often succeed when direct recovery fails.
Consider Lawsuit
Small claims court handles claims up to $12,500. Civil court for larger amounts. CSLB complaint and bond claim can proceed simultaneously.
❓ Frequently Asked Questions
What can I do if my contractor abandoned my project?
If your contractor abandoned your project in California, you have several options: (1) Send a formal demand letter demanding completion or refund; (2) File a complaint with the Contractors State License Board (CSLB); (3) File a claim against the contractor's license bond (up to $25,000); (4) Sue in small claims court (up to $12,500) or civil court for larger amounts. Document everything and get estimates from other contractors to complete the work.
Can I file a claim against the contractor's bond?
Yes. California licensed contractors must maintain a $25,000 contractor's license bond. If your contractor abandoned your project or took money without completing work, you can file a claim against this bond through the CSLB. The bond company will investigate and may pay your claim up to the bond amount. You can look up your contractor's bond information on the CSLB website at cslb.ca.gov.
How do I protect myself from mechanics liens?
Even if you paid your contractor, subcontractors and suppliers who weren't paid can file mechanics liens against your property. To protect yourself: (1) Require lien releases from the contractor before making payments; (2) Pay subcontractors directly through joint checks if possible; (3) Verify the contractor paid subs before final payment; (4) If you receive a preliminary notice from a sub or supplier, track it carefully; (5) Consider using a construction escrow account for larger projects.
Should I hire a new contractor to finish the work?
Yes, but document everything first. Before hiring a replacement contractor: (1) Take detailed photos of the current state; (2) Get at least 2-3 written estimates to complete the work; (3) Document what work was done vs. what was paid; (4) The difference between the completion cost and remaining contract amount is your "cost to complete" damages. Keep all receipts and invoices from the new contractor.
How do I file a complaint with the CSLB?
To file a CSLB complaint: (1) Go to cslb.ca.gov and click "File a Complaint"; (2) Complete the online form or download a paper complaint; (3) Include copies of your contract, payment records, photos, and communications; (4) CSLB will investigate and can discipline the contractor's license, help mediate disputes, and assist with bond claims. Abandonment is a serious violation that can result in license suspension or revocation.
What is "diversion of funds" by a contractor?
Under California Business & Professions Code 7113, "diversion of funds" occurs when a contractor receives money for your project but uses it for other purposes (like paying bills on other jobs) instead of completing your project. This is a serious offense that can result in license suspension, criminal charges, and personal liability. If your contractor took a large deposit and disappeared, they may have committed diversion of funds.
Large Project or Complex Case? I Can Help.
For abandoned projects over $50,000, mechanics lien issues, or unresponsive contractors, professional legal assistance can maximize your recovery.
Contact: owner@terms.law📅 Schedule a Consultation
For complex abandonment cases, mechanics lien disputes, or claims over $25,000, book a call to discuss your options.
📝 Create Your Demand Letter
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