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Prelim Total Payment Amount

California

Hello, We are working on a large construction project. We are amending a prelim sent in October. Since we have received a small progress payment, should we change the amount on the amendment to show what is not owed, or for the total of the project?

2 replies

Jan 13, 2021

We typically recommend avoiding sending a revised California preliminary notice, or a revised notice in nearly any state (with some exceptions, such as AZ's 30% rule). 

Under Cal. Civ. Code §8202(a)(2), the preliminary notice only requires a good faith "estimate of the total price of work provided and to be provided." So an updated/amended notice isn't particularly necessary; barring any eggregious mistake or if a separate contract is executed.

Furthermore, since the initial prelim was sent back in October, sending a revised notice could open you up to a dispute as to whether the revised prelim replaced the old one or not; potentially jeopardizing the amount of lien rights you've secured by sending the initial, timely notice. 

Here are some additional resources that reinforce this notion:

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Jan 14, 2021

You don’t need to amend your preliminary notice when you receive payments. The general contractor will probably ask you to sign a Conditional Waiver and Release form reflecting the amount of your payment. But don’t worry about amending the preliminary notice. I’m happy to answer any questions you have about this.

Cathleen M. Curl, Esq.
Law Office of Cathleen M. Curl
700 El Camino Real, Suite 200
Millbrae, CA 94030
T 650-871-5955

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