Serving preliminary notices in California is a very important requirement that all subcontractors and material suppliers must keep in mind. Not only are you expected to use the correct California preliminary notice forms, but you must also serve your preliminary notice on or before the deadline.
Missing the California preliminary notice deadline could have adverse effects on your lien rights. This guide will answer some of the frequently asked questions that you too may have about the deadline for serving a valid California 20-day preliminary notice.
- Deadline for serving a California preliminary notice
- Parties to serve a California preliminary notice on
- California preliminary notice form
- Special cases
- Consequences of failure to send a California preliminary notice
Deadline for serving a California preliminary notice
A California 20-day preliminary notice must be sent within 20 days of the day you first furnish labor or materials to a project. If, for example, you start delivering materials to a property on August 1, you are expected to serve a California preliminary notice by August 21.
Ideally, you must serve your California preliminary notice right on your first day of work. If you have all the required information with you and you have a valid California preliminary notice template, you should be able to serve a California preliminary notice as early as possible.
Missing the deadline
Missing the 20-day deadline for the California preliminary notice is not necessarily fatal to your lien rights. However, missing this important deadline will limit the amount that you may recover through a mechanics lien.
When you serve a California preliminary notice after the 20-day window, your potential mechanics lien may only cover your work starting from 20 days prior to the day when you actually serve the preliminary notice.
If, for example, you serve your preliminary notice on August 30, you have to count 20 days back to determine the earliest date that your mechanics lien can cover. In this specific scenario, your potential mechanics lien can only claim your payment starting from August 10. All the work that you have done prior to this date may not be recoverable through a California mechanics lien.
Remember that after the initial 20-day deadline, the coverage for your mechanics lien will follow the sliding scale depending on the date when you serve the preliminary notice. You are highly encouraged to serve the preliminary notice within the 20-day period to avoid any issues.
Sending a California preliminary notice 20 or more days after project completion
This is another possible scenario that some subcontractors and material suppliers experience. Sometimes a subcontractor or material supplier learns about the California preliminary notice requirement after a project has closed and payment disputes have arisen.
If, for example, you realize more than 20 days after a project has been completed that you have not served a preliminary notice, you are unlikely to be able to serve a valid California preliminary notice.
Per the sliding scale mentioned above, a potential mechanics lien only relates back to the previous 20 days prior to the day when a California preliminary notice has been submitted. If your work on the project has been completed for more than 20 days already, your preliminary notice will slide back to nothing.
Do note that you may still explore other options, including serving a warning notice such as a Notice of Intent to Lien. While you may not be able to enforce your lien rights, serving a warning notice about filing a mechanics lien may still nudge the property owner’s attention and get you paid.
Parties to serve a California preliminary notice on
This is another common concern among subcontractors and material suppliers. Remember that you only have to serve a California preliminary notice on three parties: the property owner, the general contractor, and the lender, if applicable.
You are expected to serve the California preliminary notice on all of those parties within 20 days of your first day of work. Failing to serve on one of those required parties could invalidate your California preliminary notice, so be very diligent and make sure that you send out a copy for each of them.
California preliminary notice form
California is very strict not only with its preliminary notices but also with waivers and mechanics lien documents. You have to use a California preliminary notice form as prescribed by California statutes. Otherwise, your preliminary notice may be invalidated, which will affect your lien rights.
If you serve an incorrect California preliminary notice form, you may still file a valid form at a later date. Just be mindful of the deadline – the 20-day period will not get extended even if you serve an incorrect preliminary notice form by mistake.
It is best practice to make sure that the California preliminary notice form that you are using is updated and correct. Verify that you are using the correct form before you fill it out and serve it on the required parties.
Preliminary notice validity after the sale of a property
California laws require you to serve a preliminary notice on the known property owners at the time of your work on a project. This means that in this specific scenario, you will not be mandated to serve a preliminary notice on the new property owner if the property gets sold.
It also follows that your original preliminary notice will stand and there will be no new deadline for serving another California preliminary notice on the new property owner.
However, if you have the name and address of the new property owner, you may still serve them a preliminary notice and it wouldn’t affect the validity of your original notice or of your potential mechanics lien claim.
Contract termination before the California preliminary notice deadline
It is possible for a subcontractor or a material supplier to forego a project before the first 20 days of commencing their work. Their contracts may be terminated, or other issues may arise that cause them to abandon a project.
In this case, you may still serve a California preliminary notice to recover payment for the days that you perform work. Even if your contract ends before you have the chance to serve a preliminary notice, it does not mean that you do not have the right to get duly paid for the work that you have done.
Remember, however, that the 20-day deadline still applies. If you want to be able to enforce your lien rights for the entirety of your short work period, you must serve a valid preliminary notice within the first 20 days of the first day you start working on the project.
Consequences of failure to send a California preliminary notice
Failing to serve a California preliminary notice altogether is detrimental to your lien rights. You will not be allowed to record and enforce a mechanics lien.
You do not want this to happen, so always make sure that you comply with California’s 20-day preliminary notice requirements. There is always the potential for clients to become delinquent, and payment issues can arise at any point in a project. It is best practice to be proactive and protect your lien rights by serving your California 20-day preliminary notice on time.