On smaller projects like yours the lien is typically placed when final payment is refused.If there is a disagreement that would have to be tried in civil court or hopefully there is an arbitration clause in the contract because it is much less expensive but probably not worth it for a flooring job.

My lawyer is erring on the side of just dropping the whole thing because in the end my legal costs if it made it to arbitration hearing would be $1500 bucks or so.

I can now sue tenant (or maybe arbitrate with Rhino) to try and get a judgment and collect.Obligo Policy: I request $500 from tenants bank account.

@Jay HinrichsTREC forms don't contain binding arbitration...a problem I simply cannot understand and an issue that I address in my deals by adding a B/A agreement into an Exhibit which I incorporate into my contracts. 

Arbitration .................................................................. 11K.

Also, the state of formation is likely where internal disputes would be brought among LLC members, so if you and a partner live in CA, you probably want to arbitrate in CA if the two of you had a disagreement.

try to negotiate a compromise or look at going to arbitration.  

If anything did go really wrong (outside the boundaries of our eventual legal agreement), we would just approach an arbitrator.

It may call for arbitration, or a court ruling.  

FYI, if you request the funds, and the Buyer contests, the Title company can throw it into arbitration, which costs both parties money just to facilitate, and it will hold up your property.To avoid this in the future, make your earnest deposit NON-Refundable upon completion of the inspection and appraisal period.