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If we are creating Change Orders for the project is there a way to add this cost into the original lien amount?

One of our projects just had an increase of change orders for around $200K which was obviously not in the original contract amount when the prelien was originally filed. If we are creating Change Orders for the project is there a way to add this cost into the original lien amount?

1 reply

Feb 21, 2019

Good question. First - it's not uncommon for the original amount listed on a preliminary notice to grow later on due to change orders, etc. When that happens, it is not necessary for the noticing party to update the amount of their prelim or to send additional or revised prelims in order to account for the changes as long as the amount on the original notice was an honest, good faith estimate at the time it was made. As for a lien that's already been filed, in order to update the amount of a filed mechanics lien, the lien would need to be amended, updated, or replaced with a lien filing for the new amount owed if a claimant wished to increase the amount being liened. While the California lien statute doesn't specifically allow for the amendment of liens, it may be possible to file a document indicating it should be attached to amend a current lien filing and that could serve to amend and update a filed lien. Alternatively, it could be possible for a claimant to file a new lien with an updated amount, and after filing, that claimant could release their originally filed lien - though it'd be important to be sure that no rights are being waived outside of the simple release of the originally filed document. Keep in mind - with both an attempted lien amendment or refiling, it'd be important for a lien claimant to file either document prior to the deadline to file a California mechanics lien. Once that deadline passes, it's likely not possible to update a filed lien with additional amounts. Of course, those amounts could definitely be recovered via some other recovery tool (or via an eventual lien enforcement action that brings additional claims for unfiled amounts). For more on California's mechanics lien rules, this resource should be valuable: California Lien & Notice FAQs. For more on notice amounts and change orders, this resource should help too: Should I Send Multiple Preliminary Notices in California If the Amount of Work Changes?

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