There was a NOC filed on a project we are not fully paid on

2 months ago

We performed work on a job that recently filed a NOC. We have not been paid in full on the work performed. We were hired directly by the owner. We filed a prelim notice when the job started, however, upon some recent research, we found that the owner refinanced there lending mid project. Therefore, we are in the mist of filing a stop payment notice, however, because our prelim was filed with the original lender, this is who would receive the stop payment. How do we proceed with something like this? Do we update our stop payment notice to note the new lender? Even though we did not send a prelim to them. We have already reached out to the owner and asked for payment and they aren’t responsive.

Additional info about this contractor
Project Role: Subcontractor
Project Type: Commercial
Senior Legal Associate Levelset
446 reviews

A California owner is required to notify their direct contractor if one or more loans are obtained during the project, as laid out by CA Civil Code § 8210. So, if the owner failed to provide you that notice throughout the improvement, their failure to do so shouldn’t negatively affect the contractor. What’s more, as long as the preliminary notice was properly sent, changes later on in the job shouldn’t negatively impact their stop notice or lien rights that were secured early on.

If the original lender is completely out of the picture, then sending them a stop payment notice might not be very effective – and, seemingly, sending the notice to the new lender would make more sense. Still, the safer bet might be to send the stop payment notice to both lenders to cover all bases. After all, if another party disputes the stop payment notice – that’s there prerogative, and you can move forward either looking to enforce that claim or to pursue another claim. For more stop notice discussion: What Is a Stop Notice & How Do They Work?

In addition to a stop payment notice, or as an alternative, keep in mind that a Notice of Intent to Lien will get the attention of all project participants (especially the owner and the lender), and they’ll have to give your payment claim the respect it deserves if they want to avoid a lien claim. Plus, if payment still isn’t made, filing a lien is the most powerful payment recovery tool. For more on California lien claims: (1) California Mechanics Lien Law: Rules & FAQs; and (2) How to File A California Mechanics Lien – Step By Step Guide To Get You Paid.

Disclaimer: The information presented here is not legal advice and should not be construed as such. Rather, this content is provided for informational purposes. Do not act on this information as if it is advice. Further, this post does not create any attorney-client relationship. If you do need legal advice, seek the help of a local attorney.
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