Home>Levelset Community>Legal Help>I haven't sent out the pre lien yet. Do I still do a pre lien? Is it ok to send the conditional waiver before the pre lien or with out a ore lien?
I haven't sent out the pre lien yet. Do I still do a pre lien? Is it ok to send the conditional waiver before the pre lien or with out a ore lien?
We did a 2 day project and want to submit the invoice. The GC requires that we send a waiver with the invoice. I haven't had a chance to send the pre lien yet.
1 reply
Jan 17, 2019
That's a great question, and with extremely short turnarounds, claimants are put in a unique situation regarding preliminary notices (aka pre-liens). Before getting too far along, though, there are two resources that are invaluable when talking about California preliminary notices: (1) Understanding California's 20-day Notice; and (2) California Lien & Notice FAQs.
With that out of the way, let's talk about CA notices, then conditional waivers. In California, preliminary notice must be sent by any party who does not have a direct contract with the property owner in order to preserve the right to lien. This notice must be sent within 20 days of first performing work on the job. So, a claimant can send notice at any point within 20 days of performing work and keep their lien rights preserved. For parties that spend a very short amount of time on the job site, this creates a weird situation. For one, work will probably be completed and invoiced before the preliminary notice is even due. For another, if the party sending notice happens to miss their deadline - even by just a day - they could lose all of their lien rights.
While California does allow for late preliminary notice, late preliminary notice will only preserve the right to lien for the 20 day before notice was sent, and all of the time afterward. That means when work was only performed for a day or two, late notice could be completely ineffective for claimants whose work is quickly completed. But keep in mind - the California Civil Code applies regardless of how much time is spent on-site, so obeying the notice rules is still paramount.
Regarding providing a conditional waiver, California is very clear in how waivers can be exchanged, which is helpful for potential lien claimants. When a California conditional waiver is submitted prior to payment, California statute is extremely clear in saying the waiver is not effective unless payment is actually received. In other words - a conditional waiver doesn't actually waive anything in California until payment is made. So it's perfectly reasonable (and also common) for a customer to request a conditional waiver be submitted in exchange for payment - it's what conditional waivers were made for!
Lastly - the California Civil Code is silent as to situations where preliminary notice is provided after a conditional waiver has been sent. The only timing that really matters for such a notice is the deadline.
Of course, where there's been no indication of any payment issues, and where notice will be sent at or near the same time an invoice will be provided, it might be worthwhile to let a contractor know that you're sending them a preliminary notice and why. Sometimes, a contractor might be alarmed at receiving a "pre-lien" notice right around the same time that they're receiving an invoice - and informing the contractor that the preliminary notice is coming could go a long way toward framing their reaction to the notice).