Hi. We are a metal fabrication shop. On occasion we will fabricate - but not install - a kitchen hood, or a fireplace mantel, and then ship it to the client. We have a tax exemption cert, so we pass sales tax on to our customer. Can we send out a Prelim, and potentially a lien, for this kind of work? Thank you!
Civil Code section 8400 provides that material suppliers who provide work authorized for a work of improvement have lien rights. The lien only covers materials actually incorporated into the work of improvement. But even if not actually incorporated, you may be covered if your materials are specially fabricated for the project. Is the "client" the property owner? If not, there may be other issues.
Hi Treg,
Thank you for your answer. The things we make are always specially fabricated (in that they are custom pieces, aesthetically & functionally). They are almost always permanent fixtures.
Sometems we are contracted directly with the home owner, and sometimes we are a sub to a GC or an architect.
Do you mind elaborating on the issues that might be present when we are *not* contracted with the owner?
I know that when we *are* in contract with an owner, we do not need to send a prelim, because the civil code auto-ensures our lien rights.
Thank you!
If you are a subcontractor to the general contractor on the project, you would have to serve a preliminary notice to preserve your lien rights. You would also likely have to prove that your materials were actually incorporated into the project. But if the materials were specially fabricated for the project, that requirement may not be as strict. If you are a supplier to another supplier, you may not have any lien rights. Each of these situations are generalizations and depend heavily upon the particular facts.
Thank you.
I took a class and learned that the answer to most legal questions is "it depends"!
Ha! Correct. There's almost always no very clear answers.