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If the following is part of my contract do I still need to send a preliminary notice ?

CaliforniaPreliminary Notice

ntractors are required by law to be licensed and regulated by the Contractor’s State License Board. Any questions concerning a contractor bay be referred to the registrar of the board whose address is: Registrar, Contractor’s State License Board, 10201 N Street, Sacramento, CA 95814. NOTICE TO OWNER Under the California Mechanics' Lien Law, any contractor, subcontractor, laborer, supplier, or other person or entity who helps to improve your property, but is not paid for his or her work or supplies, has a right to place a lien on your home, land, or property where the work was performed and to sue you in court to obtain payment. This means that after a court hearing, your home, land, and property could be sold by a court officer and the proceeds of the sale used to satisfy what you owe. This can happen even if you have paid your contractor in full if the contractor's subcontractors, laborers, or suppliers remain unpaid. To preserve their rights to file a claim or lien against your property, certain claimants such as subcontractors or material suppliers are each required to provide you with a document called a "Preliminary Notice." Contractors and laborers who contract with owners directly do not have to provide such notice since you are aware of their existence as an owner. A preliminary notice is not a lien against your property. Its purpose is to notify you of persons or entities that may have a right to file a lien against your property if they are not paid. In order to perfect their lien rights, a contractor, subcontractor, supplier, or laborer must file a mechanics' lien with the county recorder which then becomes a recorded lien against your property. Generally, the maximum time allowed for filing a mechanics' lien against your property is 90 days after substantial completion of your project.

1 reply

Oct 29, 2018

First, I'd like to note that the above is a good recap of California mechanics lien law and that including terminology like that in a contract goes a long way toward making sure everyone involved understands the potential for a mechanics lien filing. However, by itself, the above language does not fulfill the requirements set out by the California Civil Code. Without fulfilling those notice requirements (which we break down here - California Lien and Notice FAQs), a valid mechanics lien may not be filed. First, depending on the claimant's roll on the project, notice will need to go to parties other than the claimant's customer. If the claimant is a prime contractor, notice must be given to the project's lender (if one is present). If the claimant's customer is someone other than the property owner, notice must go to the prime contractor, the property owner, and the lender (if one is present). Further, notice must contain the name and address of the owner, the direct contractor, and the construction lender, if any, under § 8102(a)(1-3) of the California Civil Code. Plus, while the above language is insightful, the following text must be included on the notice in boldfaced type: “NOTICE TO PROPERTY OWNER EVEN THOUGH YOU HAVE PAID YOUR CONTRACTOR IN FULL, if the person or firm that has given you this notice is not paid in full for labor, service, equipment, or material provided or to be provided to your construction project, a lien may be placed on your property. Foreclosure of the lien may lead to loss of all or part of your property. You may wish to protect yourself against this by (1) requiring your contractor to provide a signed release by the person or firm that has given you this notice before making payment to your contractor, or (2) any other method that is appropriate under the circumstances. This notice is required by law to be served by the undersigned as a statement of your legal rights. This notice is not intended to reflect upon the financial condition of the contractor or the person employed by you on the construction project. If you record a notice of cessation or completion of your construction project, you must within 10 days after recording, send a copy of the notice of completion to your contractor and the person or firm that has given you this notice. The notice must be sent by registered or certified mail. Failure to send the notice will extend the deadline to record a claim of lien. You are not required to send the notice if you are a residential homeowner of a dwelling containing four or fewer units.”

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