Do I need to file a new Preliminary Notice if the Owner has informed me of its new address? What if a new lender becomes known? In general, what are the laws in CA to protect my interest in a claim?

5 months ago

In general, unable able to find CA Code that informs me if refiling is necessary to protect my interest in the claim.

Chief Legal Officer Levelset

That’s a great question, let’s take a look.

Generally in California, only one preliminary notice is required. Unlike Arizona, in which n additional notice can be required if the project exceeds the initial scope, California has more of a “send it and forget it” type of requirement – especially with respect to changes to the amount of work. But what about if new information becomes available?

California preliminary notices to the property owner should be given: “at the person’s residence, the person’s place of business, or . . . the owner’s address shown on the direct contract, the building permit, or a construction trust deed.” If a preliminary notice is given to the owner at one of those addresses, it is compliant with California requirements – and since there is no requirement to provide additional preliminary notices in California – getting a “new” address doesn’t trigger a new notice requirement. California law specifies that “a claimant need give only one preliminary notice to each person to which notice must be given under this chapter with respect to all work provided by the claimant for a work of improvement.” If the notice wasn’t sent to one the above addresses and wasn’t actually received by the property owner, then the question of whether to send to the new address is slightly different.

California requires that preliminary notice be given to the lender in order to be valid. And, while the direct contractor is technically obligated to provide sub-tier parties with the name and address of the construction lender, there is not really any specific consequence for not doing so. Also, if a loan is obtained after the work began, “the owner shall give notice of the name and address of the construction lender or lenders to each person that has given the owner preliminary notice.”

When the information is not provided by the direct contractor or property owner, however, there is at least some California case law that provides a further obligation to inquire into the identity of a construction lender. Romak Iron Works v. Prudential Ins. Co. 104 Cal.App.3d 767, (1980) held that a claimant may not solely rely on a representation by the general contractor for purposes of determining a construction lender, and that that the claimant had a duty to inspect the building permit and the construction trust deed for the listing of the lender’s name and address.

When the identity of the lender is determined, a preliminary notice should likely be delivered, as a failure to comply with the preliminary notice rules (that require notice to be provided to the construction lender, if any) prohibits the potential claimant form filing a valid and enforceable lien, if it becomes required.

If you still have a desire to read about California preliminary notices after all that, some FAQs and information at-a-glance can be found on the California preliminary notice page of Levelest’s Learning Center, and a in-depth look at CA prelim requirements can be found in our Ultimate Guide to California’s 20-day Preliminary Notice.

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