If a subcontractor abandoned the project and was given a termination letter, do their prelim rights become null and void?
3 replies
Jan 10, 2020
To preserve the right to lien in California, preliminary notice must be sent. That notice must be sent within the first 20 days of furnishing labor or materials to the job. Late notice will be partially effective - but it will only work to preserve the right to lien for work done in the 20 days prior to the notice being sent. And, finally, recall that a subcontractor's right to lien will only be preserved to the extent that they're owed and unpaid for the work they've performed.
With all of that in mind: If a subcontractor has been terminated before they've had the opportunity to send notice, then the notice may still be effective to preserve the right to file a lien for the work they did during the 20 days immediately prior to sending notice. But the point remains: a mechanics lien may only be filed for amounts owed for work that's been done, and they'll only be available to the extent that lien rights were preserved by notice.
I hope this was helpful! For more information on California preliminary notices, these resources should be helpful:
- California Preliminary Notice Guide and FAQs- The Ultimate Guide to California’s 20-Day Preliminary Notice
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Jan 10, 2020
That didn't answer my question. Thanks anyway.
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Jan 10, 2020
I'm sorry you feel that way, and hopefully, this additional info will help:
A subcontractor being terminated from a job won't automatically mean they can't send a preliminary notice. Nothing in California's mechanics lien statute prohibits sending a preliminary notice if you abandon the job or are terminated.
But, as discussed above, "prelim rights" are only effective to the extent that a subcontractor has performed work and is owed payment for that work. So, if no payment is owed, then there are no lien rights - making a preliminary notice more or less worthless on that front.
Thanks for the feedback!