We are a GC doing TI work in a building. We are requesting prelim info from our client and they are asking what the section for lender refers to. On a 20 Day Preliminary Notice the “lender” section is only referring to an entity (bank, etc.) that provides funds for the construction “work” and does not refer to the lender who is providing the loan/mortgage of the building correct?
The term lender applies to any lender that is using the property in question for security for its loan. This includes construction loans and conventional loans. Because mechanic's liens potentially give you the right to encumber the property and stop payment notices the right to interfere with the distribution of funds on a project, one of the purposes of preliminary notice is to put all stake holders on notice of these rights. This is why all lenders must be notified.
Yes, the "lender" is the bank or other lending institution providing construction funds for the work of improvement. And, it is the entity you, and the subs, will serve a Stop Payment Notice to if you are not paid.