We are a commercial general contractor in AZ. We recently completed work on (and were paid by owner for) a project that we had filed a prelim notice for with no issues . Last month an amendment to the original contract was created and executed for a completely new scope of work on the building next to the main building that we just completed construction on. It's really like a completely separate project, with a different address and completely separate set of financials. My understanding is that the reason an addendum was done, as opposed to a new contract, was that the owner preferred this for administrative reasons. With work now commencing on this new project, I need to protect this job. Can I file a new prelim based on just the dollar amount on the amendment? Or am I required to file an amended prelim to the original since addendum is tied to the original contract? If the latter, is there any way around this? The owner may run into issues with their lender if we have to file the amended one.
If this is for the same parcel of property and amends the original contract, then you may have to file an amended preliminary notice. If the updated total price exceeds by 30% (I assume the contract was at or after 2020) the estimated total price provided in your preliminary lien, you must serve an additional preliminary notice. If you do not this, that may result in a monetary limit in your recovery if you must foreclose on the lien. You cannot send some "an additional amount" preliminary notice. It must be an amendment that covers the total new amount, if it hits the threshold noted.
There is no way around this. Do not do this or do this incorrectly and you risk a recovery amount below the amount that could be at issue.
Retain an attorney to avoid mistakes. The cost for the attorney to protect your business is a fraction of the cost of mistakes that will be made.
Feel free to reach out with questions.
Robert Murillo
robert@pivotallegal.com.