More about California's 20-day notice
California law requires contractors and suppliers to send a preliminary notice within the first 20 days on a construction project. Hence, it is also known in California as a “20-day notice.” A preliminary notice is a document used on construction projects in many states to share information about your role on the job, preserve your lien rights, and get paid faster.
In California, everyone who does not contract with the property owner must send a notice within 20 days of first furnishing labor or materials to the construction project. Notice must be sent to the property owner, the general contractor, and the construction lender (if applicable). If that the deadline is missed, a notice can still be sent, but it will only protect labor and/or materials furnished in the 20 days prior to the date the notice was made.
Sending a preliminary notice is a critical step that secures payment for contractors and suppliers in California — and speeds up payment. But the benefits aren’t just enjoyed by sub-tier parties on a project. Sending a 20-day notice helps property owners, contractors, developers, lenders, suppliers, and others all communicate and work together smoothly.
It is well established that contractors & suppliers who send California preliminary notices get paid faster, mostly because they help owners & GCs with critical parts of the payment process.
Read the ultimate guide to California’s preliminary notice process.
California requires preliminary notice for payment rights
California Civil Code states that “before recording a lien claim, giving a stop payment notice, or asserting a claim against a payment bond, a claimant shall give preliminary notice.” Anyone who doesn’t have a contract with the owner is required to send notice to the:
- Property owner (or reputed owner)
- Direct contractor (i.e. the GC)
- Lender (if one exists)
Because the general contractor typically has a contract with the property owner, they are generally exempt from the preliminary notice requirement. However, they do need to send notice to the lender, if one exists on the project.
These requirements are the same on both public and private construction projects. However, the specific people who need to receive the notice are a bit different. On public projects, you must send a 20-day notice to the public agency, the prime contractor (GC), and the surety (if one exists).
If you’re working on a residential or commercial project in the state and fail to send this 20-day notice, you will lose your right to file a California mechanics lien if you don’t collect payment. It’s always a good idea to protect your lien rights on California projects, since a mechanics lien is one of the strongest tools that construction businesses have to ensure they get paid.
Preliminary notice is also required on public construction projects with a payment bond, like those operated by the state or county governments. Sending California’s 20-day notice will protect your right to make a bond claim in California as well. If you didn’t send a preliminary notice, you won’t have the right to make a claim against the bond if you are not paid.
If you’re a California subcontractor or supplier working on a public project that doesn’t have a payment bond, the state gives you another tool to collect payment: the California Stop Notice. When you send a stop notice, the public entity in charge of the project is required to immediately withhold money from the GC in the amount you are claiming.
However, you can only send a stop notice in California if you previously sent a 20-day preliminary notice.
Using preliminary notice in California
Because California’s 20-day preliminary notice provides so many benefits, contractors and suppliers ought to send these notices on every job. In fact, since the notice requirement is so crucial to the state’s construction payment process, these notices are required. In fact, a contractor can be fined by the California State Licensing Board (CSLB) for failing to send a preliminary notice.
California’s preliminary notice deadline
California’s deadline to send preliminary notice is 20 days from the date of first furnishing labor or materials. Essentially, you’ll need to send notice within the first 20 days you’re on the job. However, the good news is that failing to send preliminary notice doesn’t mean you give up your payment rights entirely. You can deliver notice late – but you will only be able to claim payments due for the 20 days prior to the notice.
So the longer you wait to send notice in California, the less you’ll be able to pursue through a mechanics lien or bond claim.
Recording preliminary notice gives sub-tier parties even more protection
Construction businesses can also file their preliminary notice with the California county recorder’s office for even greater payment protection. Once you file preliminary notice, the county recorder is supposed to notify you if a notice of completion or cessation is filed for the project.
Since lien deadlines in California are determined by the completion of the project as a whole, this can be a help. However, since there is no penalty or liability for the recorder’s office failing to send notification, the benefit might be less than it otherwise appears.