Home>Levelset Community>Legal Help>In California, if we mis-identify our "customer" as a General Contractor when in fact they are a property owner building without a licensed GC on a preliminary lien notice, does that negatively impact our lien rights?

In California, if we mis-identify our "customer" as a General Contractor when in fact they are a property owner building without a licensed GC on a preliminary lien notice, does that negatively impact our lien rights?

CaliforniaPreliminary Notice

We are a specialty subcontractor and most of the time we are subbed to a GC. However, sometimes in California a home owner is building/remodeling their own home without a licensed GC involved, in which case we work directly for the home owner. In these cases, if we incorrectly identify the property owner as a GC on the 20-day California preliminary lien notice form, could that negatively impact our lien rights should it become necessary to enforce them at a later date?

1 reply

Oct 15, 2018

That's a fair question, and it's one we've gotten a few times recently at the Construction Legal Center. Ultimately, extra notice being sent to a property owner is unlikely to negatively affect lien rights. For one, when contracting with an owner, a contractor need only send notice to the lender (if one is present). Sending additional notice when not required will not negatively impact lien rights - on the contrary, sending additional notice will likely be beneficial! zlien explains the idea in detail in this article: Why You Should Send Preliminary Notice Even If It’s Not Required. Essentially, sending such a notice can still have positive effects beyond the preservation of lien rights. Notices speed up the payment process by increasing project visibility and opening lines of communication - both of which help build relationships and trust along the payment chain. As for whether misidentifying the property owner could negatively impact notice sent to a lender, that seems unlikely as well. Under § 8102(a) of the California Civil Code, the following information must appear on a prelim to the extend known to the person giving notice (among other information): (1) The name and address of the owner or reputed owner. (2) The name and address of the direct contractor. (3) The name and address of the construction lender, if any. Further, under § 8102(b), "Notice is not invalid by reason of any variance from the requirements of this section if the notice is sufficient to substantially inform the person given notice of the information required by this section and other information required in the notice." Thus, even a flawed notice may still be effective to preserve lien rights.

0 people found this helpful

Helpful