Can we include an un-approved change order amount in our Preliminary Notice?

3 weeks ago

We are issuing a Preliminary Notice to our customer that we are currently working with.
However, we have a change order that is approved by our customer, but not theirs (the owner).
Can this amount be added to the original contract amount and included in the Notice?

Legal Associate Levelset
12 reviews

I’m assuming this is a commercial project, as the required notices for Virginia residential projects (Notice to Mechanics Lien Agent) doesn’t require a contract amount.

Virginia preliminary notices on commercial projects (§43-11 Notices)

These types of Virginia preliminary notices are particularly unique compared to other states, as they are a two-step process. One is provided at the beginning of the project and one is provided post-work. Both of these notices require some sort of contract amount to be included.

§43-11 preliminary notice

However, for the preliminary notice, under VA Code Ann. §43-11, the subcontractor is only required to “state the nature and character of the contract and the probable amount of his claim.” This merely requires a the contract price or a good-faith estimate of the the amount. Including unapproved change order amounts may be a good faith estimate, but excluding the value of the change order will not affect the extent of lien rights at the end of the project; and ultimately might be the safer play.

§43-11 post-work notice

When the specific (full) contract amount comes into play is when filling out and serving the post-work notice. The statute states that the second notice shall state the “correct amount, verified by affidavit.” The amount stated on this second “post-work” notice will determine the extent of the mechanics lien rights.

For more information, you may want to read our Virginia Preliminary Notice Guide

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