We have a time and material job where we estimated and filed our prelim for $30,360.00 within the 20 days of starting the job on 2/4/2021. We are in California. Now the scope of work has changed and we are getting more work orders. My boss asked me to file for $100K now so we will have lien rights. The Levelset agent sent me an article that says it is not required to file in CA however one example in the article is exactly what we are concerned about. It says an equipment company filed their prelim for $10K but later filed a Mechanics Lien for $160K and the judge said they under estimated and invalidated their claim. What should we do? File a new prelim for the $100K, how does that effect our lien rights because it would change the filing date to March which is beyond the 20 days?
Generally, there's no need to send revised preliminary notices in California simply because the scope of work changes. As you mentioned above, Levelset breaks that down in detail here: Should I Send Multiple Preliminary Notices in California If the Amount of Work Changes?
Notice that the article doesn't state that the preliminary notice was invalid simply because the amount was underestimated. Rather, the court found the original preliminary notice in that case was “not derived by any rational process, [with] no bearing whatsoever on the actual work done and to be done on the project...” Meaning, the number was essentially made up - the notice sender hadn't made an effort to produce a number relating to their work, at all. As mentioned in the article "California requires a good-faith estimate of the actual contract."
With all of that being said, it's common for CA construction businesses to be wary when their initial contract and the amount they end up billing don't line up very much. And, it's relatively common practice for CA businesses to send revised preliminary notices. Ultimately, it's up to every business to do what they feel is necessary to best protect their rights.
If you're still unsure and need additional guidance, reaching out to California construction lawyer for their input could be valuable. One of these lawyers may be able to help: Top California Construction Lawyers.