A preliminary notice serves as a tool to notify the appropriate parties on a project – the Lender, Owner, and GC – of the various jobsite participants and who will be entitled to lien rights should they fail to receive payment for their work. A proper preliminary notice must be served for the claimant to retain lien rights in the event they are not paid for their work. Sending a preliminary notice may also help in simplifying and quickening the payment process – meaning you may be reimbursed for your work faster and more consistently.

Any subcontractor or supplier providing material, equipment, or labor to a project must serve a preliminary notice. A GC with a direct contract with the owner is not required to send a preliminary notice unless there is a lender on the project.

Prelims: As a rule of thumb, a prelim notice ought to be served early, soon after contracting for the work or as soon as possible after work commences. In CA a prelim notice can be served late but it will only cover lien rights for the preceding 20 days from the service of the notice (Civil Code §8204).

Liens:

GC’s – the deadline to file a lien is within 90 days from the completion of the project. If a Notice of Completion or Cessation has been filed, this timeline goes down to 60 days from the filing of the notice. (Civil Code §8412). Liens must be enforced within 90 days of recording, otherwise the lien will expire.

Subs/Suppliers – the deadline to file a lien is within 90 days from the completion of the project. If a Notice of Completion or Cessation has been filed, this timeline goes down to 30 days from the filing of the notice. (Civil Code §8414) Liens must be enforced within 90 days of recording, otherwise the lien will expire.

Construction sites often employ multiple trades, and with them the number of subcontractors and material and equipment suppliers can really start to add up. Sending a preliminary notice lets the owner and general contractor know exactly who is on the job and who will be able to lien the property if they are not paid for their work.

With this increased visibility of who is on a job-site, a company who sends a preliminary notice helps to ensure that they are seen and addressed by all parties farther up the contracting chain. The owner has an interest in preventing Mechanic’s Liens from being filed against their property, and receiving preliminary notices prompts them to make sure payments get to whom they need to go.

A preliminary notice protects the money of the party sending it. The party receiving the notice can now protect themselves from having a lien filed against the property. With this mutual level of protection for both parties, payments are more likely to be made on time and with greater consistency – both parties win.

In most cases, a preliminary notice is required to properly file a Mechanic’s Lien. Where a preliminary notice is required, it must have been properly served to retain lien rights.

Billing rate is determined by volume of prelims served per month (click here for pricing). Billings are sent monthly, on the last day of each month.