Construction professionals at work

I ran across an article this morning in the Los Angeles Times reporting that there is a “commercial building rebound” in Southern California as we all head into the spring and summer months.

This is great news for the construction industry in the Los Angeles area (and really, everywhere). But as companies take in more business and possibly start extending their cash because of the increasing availability of projects, they must be careful to take the necessary steps to preserve their mechanics lien rights. If we learned anything during the recession it’s that situations can turn sour and payments can be delayed.

Preliminary Notices Protect California Contractors

So what can you do as a contractor or material supplier to protect your rights to get paid on a California project?  The answer is the preliminary notice.

You may never have had a problem getting paid, but the moment you run into this problem for the first time you’ll yearn for the right to file a mechanics lien. Mechanic liens get companies paid, plain and simple.  They work.

In California, though, you’ll be unable to file a mechanics lien unless you delivered your preliminary notice on time.  These notices – called 20-Day Preliminary Notice – must be furnished within 20 days of first delivering labor or materials.  You don’t want to send them off late, but if you do, they may still have some effect (See Even Late Preliminary Notices Worth Sending).

Not only does a preliminary notice secure your ability to later file a mechanics lien, but it also acts to prioritize your debt with the property owner.

If Unpaid, File A Lien Quickly

You protected your rights to get paid by delivering preliminary notice…but, you’re still unpaid.  What to do?

Many contractors and suppliers procrastinate on filing a mechanics lien as long as possible, and this is understandable.  Sometimes, you spend a lot of relationship capital when filing a mechanics lien. However, the longer you wait, the more likely you’ll miss your mechanics lien deadline or run into an issue when filing.

Plus, especially in Los Angeles, county backlogs can really delay your mechanic’s lien claim. For this reason, it’s important in these counties to use a mechanics lien service who will arrange for your lien to get filed by private courier.

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