How should I proceed with a project in which our prelim was filed late and the mail returned?

4 months ago

We recently sign up with Levelset and sent a preliminary notice past the due date for a job that began in May. I am showing that the document was returned from the GC but I do not know if they rejected it or if it was undeliverable. My main question is first, should I go ahead with filing the lien? And second, should I request the returned prelim be sent back to me so that I have it for our attorney if after we file a lien we still do not receive payment?

Senior Legal Associate Levelset

I’m sorry to hear about that missed deadline. Before diving in – I should note that I’m not able to advise you on how you should proceed in your particular situation. However, I am able to provide some information that I think will be helpful for you to determine what options might make the most sense under your circumstances.

First, as you may know, late preliminary notice will still be partially effective in California. When notice is sent late, it will be effective to preserve the right to lien for the 20 days before the notice was sent, as well as the work performed afterward.

Second, notice is generally effective as long as it was sent, as required, to the appropriate parties. The actual receipt of the notice is typically less important as long as the notice was sent in the manner required to the correct recipients at the correct address. Specifically, under § 8116 of the California Civil Code, when notice is given by mail, it’s considered “given” when it’s deposited in the mail. Of course, to be effective, it must be mailed to the appropriate address. Under § 8108 of the California Civil Code, the proper address for a contractor will be at the contractor’s residence, place of business, or at “the contractor’s address shown on the building permit, on the contractor’s contract, or on the records of the Contractors’ State License Board.” So, if the notice was properly mailed to one of those addresses, generally, that notice will still (at least partially) preserve the right to lien.

Regarding a preliminary notice that could not be delivered – it would likely be wise to obtain a notice which was sent but not delivered. That should help to provide some clarity as to why the notice could not be delivered, and that should help a claimant decide whether or not they should proceed with their claim. If there’s no issue with the mail piece and if it was sent to a correct address, that would seem to confirm the ability to file a lien (to the extent that one is available). More importantly, that documentation would be valuable in a dispute over a filed mechanics lien.

Lastly, keep in mind that many potential lien claimants find that merely threatening or warning that a lien will be filed can be enough to compel payment without the cost or headache of an actual lien filing. By sending a document like a Notice of Intent to Lien to both the owner and the prime contractor (and/or their customer), a would-be claimant can make sure their issue is known. Plus, when the owner is involved, that can help put additional pressure on the contractor and/or customer to resolve the dispute before the property title is encumbered by a lien claim. More on that idea, here: What Is a Notice of Intent to Lien and Should You Send One?

| 0 Upvotes
Your answer or comment:
Are you a Registered Expert?
You are not logged in and will be posting
anonymously. Log in Now