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How to File a 20-Day Preliminary Notice in California, A Mechanics Lien Requirement

How to File a 20-Day Preliminary Notice in California, A Mechanics Lien Requirement

July 2, 2019

The preliminary notice in California is one of the most important documents that every construction professional in the state must be familiar with. Without a valid 20-day preliminary notice, mechanics liens in California are rendered invalid. Knowing how to properly prepare and serve a preliminary notice in California is therefore key to protecting your mechanics lien rights.

This article should help you understand the basic steps in filing a 20-day preliminary notice properly, from the step-by-step instructions, the most common mistakes, and the chief reasons why the preliminary notice must be filed at all times.

California 20-Day Preliminary Notice Instructions: Four Basic Steps

  1. Collect the information required in the California preliminary notice
  2. Prepare the 20-Day preliminary notice form
  3. Serve the notice to the intended recipients within the 20-day window
  4. Keep a record of proof that the preliminary notice has been served

California 20-Day Preliminary Notice Steps

Collect the information required for the California preliminary notice

The following information must be included in the preliminary notice in California:

  • A general description of the work provided or to be provided
    • This will be general statement that covers the type of labor and/or materials that you have provided or will be providing to the project
  • An estimate of the total price of the work provided and/or to be provided
    • This estimate should be an amount with reasonable basis and not just a random guess
  • A description of the work site, including street address if available
    • This description should be sufficient for identification; use street address or legal property address if available
  • The name and address of the property owner or reputed owner
  • The name and address of the lender, if any
    • This information could be requested from the general contractor, as stipulated in California Civil Code § 8208
  • The name and address of the claimant
    • This should be the name of your business, if you are operating a business, or your legal name, if you are filing as in individual
  • The name and address to whom the claimant is providing labor or materials to
    • This should be the name of the business or of the person with whom you are contracting with
  • The following statement in boldface type
    • This statement should be written exactly as it is; do not shorten or revise
NOTICE TO PROPERTY OWNER
EVEN THOUGH YOU HAVE PAID YOUR CONTRACTOR IN FULL, if the person or firm that has given you this notice is not paid in full for labor, service, equipment, or material provided or to be provided to your construction project, a lien may be placed on your property. Foreclosure of the lien may lead to loss of all or part of your property. You may wish to protect yourself against this by (1) requiring your contractor to provide a signed release by the person or firm that has given you this notice before making payment to your contractor, or (2) any other method that is appropriate under the circumstances.
This notice is required by law to be served by the undersigned as a statement of your legal rights. This notice is not intended to reflect upon the financial condition of the contractor or the person employed by you on the construction project.
If you record a notice of cessation or completion of your construction project, you must within 10 days after recording, send a copy of the notice of completion to your contractor and the person or firm that has given you this notice. The notice must be sent by registered or certified mail. Failure to send the notice will extend the deadline to record a claim of lien. You are not required to send the notice if you are a residential homeowner of a dwelling containing four or fewer units.

Other information that you may have to collect for special cases:

  • If you are a subcontractor filing a preliminary notice and you have not paid all compensation due to a laborer, you must include in your preliminary notice the name and address of that laborer.
  • If you are filing a preliminary notice and you have an invoice or certified payroll documents that contain the required information, sending a copy of these documents would be sufficient, according to Civil Code § 8202(c). Make sure however that all other requirements, including the statement in bold above and the signatures are included.

Prepare the 20-day preliminary notice form

Once you have all the information you need, preparing the document is easy. There are sample forms on the internet that you can download and fill out with the information that you need. Make sure that you include the statement above in boldface type on your form.

When looking for a free preliminary notice forms online, make sure that the form contains all the required information. Other information such as lender’s name and address may not be applicable to you, and they can simply be filled with an “N/A”.

Preliminary Notice California

Serve the notice to the intended recipients within the 20-day window

This is a two-part step: you must serve the preliminary notice to the right people and serve it within the right time period.

Who should you serve the California preliminary notice to?

If you are working on a private works project, you must serve the notice to the property owner and the general contractor.

  • If you are working on a private works project that is funded through a lender, then you must also serve the preliminary notice to the lender.
  • If you are the general contractor in direct contact with the property owner, you must serve the preliminary notice to the construction lender.
  • If you are the general contractor but your project is not funded through a lender, then it is still best practice to send preliminary notice to the property owner, even if not required.

If you are working on a public works project, you must serve the notice to the public entity contracting officer and the contractor to which you are providing work.

  • If  you are working on a public works project that has a bond on it, you must also serve the preliminary notice to the bonding company.
  • If your project was contracted by CA DPW or the CA General Services, you must serve the preliminary notice to the disbursing officer of the department involved.

Preliminary notice flowchart

How should you serve the preliminary notice in California?

The notice must be served by either registered mail or certified mail.

When should you serve the preliminary notice in California?

The 20-day preliminary notice in California must be served within 20 days after the first day of furnishing labor or materials to a project. Ideally you should serve the notice on the first day of work and not wait until the 20th day.

Note that even if you missed the 20-day deadline, you are still allowed to file a preliminary notice. However, your preliminary notice will relate back to 20 days prior to when you actually served the late preliminary notice. This means that all the work you have done prior to the 20-day count-back will not be protected by your lien rights.

Keep a record of proof that the California preliminary notice has been served

This last step is not a requirement but it will be very helpful if payment problems arise and you end up filing a mechanics lien against your contractor or the owner. Because the preliminary notice is a statutory requirement for the mechanics lien to be valid, your lien may be contested on the basis of failing to serve a preliminary notice.

It is therefore very important to get documented prove that the intended party has received your preliminary notice.

Here are a few tips on how you can do it:

  • Serve the preliminary notice using certified mail with return receipt option and make sure that you receive a copy of the return receipt card
  • Get a copy of US postage records that prove you have sent the documents (e.g. receipts)
  • Have the recipient sign an affidavit of receipt

How to send a California Preliminary Notice online

Yes, you can send a preliminary notice over the internet through Handle.

Preliminary notices with inaccurate information –even small misspellings– are invalid and you might not find out the one you filed is invalid up until you use it as proof when filing a mechanics lien. Lots of companies lose their lien rights because of errors and even incorrect way of sending them.

Sending a California preliminary notice via Handle ensures that your notice is valid because data comes from Handle’s suppository of public property records and complete data on owners, contractors and other construction stakeholders, as well as a valid way of sending notices as mandated by California law. Material suppliers, subcontractors, and contractors will benefit from using a service that ensures accuracy and validity of the notices they send to secure their right to lien.

send preliminary notices online

Fortunately, you can skip the trip to the clerk’s office, the label printing, and the hours of research for the correct names and addresses by using Handle to send your preliminary notices online.

Common Mistakes When Filing a 20-Day Preliminary Notice in California

  1. Not serving the preliminary notice within the 20-day deadline

    Because the 20-day window for the preliminary notice is relatively flexible, most claimants wait until the last minute before serving a preliminary notice. This is bad practice. If you end up not getting paid by a delinquent client, you will not have lien rights for all the unpaid work that you have done since day 1.

  2. Not providing all the required information

    The names and addresses of the owner, contractor, lender, and other parties are important, but so are the general description of work, the estimated amount, and the Preliminary Notice statement. Ensure that you have all the required details, otherwise your notice may be rendered invalid.

  3. Not providing a reasonable value for the estimated amount of work

    Rulings have been made against mechanics liens whose preliminary notices were deemed defective because of the item on estimated amount of work. It is understandable that the scope of your work may change and the estimated amount could be significantly different from the actual value, but just keep in mind to make a reasonable estimate.

  4. Not keeping proof that you have served the preliminary notice

    This is also another aspect that some owners or contractors used against claimants, so be sure that you have documentation that you could show to court to prove that you have done your due diligence in protecting your lien rights.

Private WorksPublic Works
Parties in direct contact with the general contractor MUST submit a preliminary notice.Parties in direct contact with the general contractor are NOT required to submit a preliminary notice
Parties do not answer to a public entity / government department.Parties that are required to serve a preliminary notice must deliver the notice to the public entity contracting officer. The notice may also have to be served to the disbursing officer of either the Department of Public Works or the Department of General Services.
Preliminary notice protects parties’ right to file a mechanics lien.Preliminary notice protects parties’ right to file a Stop Notice and payment bond claims.

Three Key Reasons Why Filing a 20-Day Preliminary Notice is Very Important in California

To inform the property owner and top-tier parties of your participation in the project

One of the reasons why preliminary notices are required is because it helps property owners and general contractors track which parties are working on their project.

Large-scale projects can involve multiple contracts. Serving a preliminary notice to the parties in charge will let them know that you are 1) working on their construction project, and 2) you are being proactive in protecting your mechanics lien and bond claim rights.

To subscribe to construction best practices

Some construction professionals may hesitate serving a preliminary notice, especially if not required. However, it is considered industry best practice to serve a preliminary notice even if not required by law. 

Serving the preliminary notice standardizes your administrative procedures as a company. You start gathering important client information early in the project and you also open communication lines among the different parties that you will be dealing with.

To protect your right to get paid for your services.

The most important reason to file a 20-day preliminary notice in California is because doing so protects your lien rights and bond claim rights. Whether you’re working on a private or a public project, these rights will ensure that you get duly compensated for your services.

Always remember that serving the preliminary notice is one of the first steps you can do to ensure that you preserve this right.

 Further reading