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GC pre-lien or only sub contractor

CaliforniaPreliminary Notice

as a GC on a project do you pre-lien? or only as a sub contractor? thx

1 reply

Nov 3, 2020

The California 20-day preliminary notice requirements only apply to GCs/direct contractors when the pr oject has a "construction lender" on the project. See Cal. Civ. Code §8200(e)(2): " A claimant with a direct contractual relationship with an owner or reputed owner is required to give preliminary notice only to the construction lender or reputed construction lender, if any."

So this begs the question, what is considered a "construction lender" in California? This term is defined by California law as either:

(a) A mortgagee or beneficiary under a deed of trust lending funds with which the cost of all or part of a work of improvement is to be paid, or the assignee or successor in interest of the mortgagee or beneficiary.
(b) An escrow holder or other person holding funds provided by an owner, lender, or another person as a fund for with which the cost of all or part of a work of improvement is to be paid.

If such a "construction lender" is present, then a preliminary notice needs to be sent by a GC to that party to secure lien rights.

For more on California preliminary notices, see the Ultimate Guide to California's 20-Day Preliminary Notice

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