Is there a deadline for sending a preliminary notice before I lose access to the Mechanic's Lien?

I did an energy audit for a customer and the engaged a contractor to do the work for 5% of the contract price who finish the job back in April. Prior to giving the contractor the referral I spoke with him personally and he agreed to work under our terms, which was 5% of the contract which paid for the referral and other tasks we would perform on his behalf. This was done on a verbal agreement and a handshake. My company has done this with other contractors who paid. Now this contractor is not paying our invoice or returning calls. The lender loaned the money for the energy efficiency retrofit to the homeowner but sent payment directly to the contractor. Can I still send the preliminary notice and if so to who? The lender, the contractor and lender, or lender, contractor, and homeowner?

Vacaville, CA -

Attorney Answers (3)

George William Wolff

George William Wolff

Construction / Development Lawyer - San Francisco, CA
Answered

The facts are not entirely clear here.

Did you do any work to help out with the construction work.

If so, what did you do and for whom? And when did you last render those services?

Usually a 20 day notice has to be served at the very latest within 20 days after you last did work on the project, and hopefully earlier.

If this was not done, you probably have no lien rights unless you could be considered a design professional.

But you likely have a breach of contract claim against the contractor, if you can establish the terms of your contract somehow.

I would be pleased to discuss this in more detail with you tomorrow, without obligation, if you have time tomorrow.

George Wolff

WOLFFLAW.com

San Francisco CA

(415)788-1881, ext. 222

This is NOT legal advice, just a general discussion of the law, as we are not familiar with the specific... more
Scott G Wolfe JR

Scott G Wolfe JR

Construction / Development Lawyer - New Orleans, LA
Answered

The short answer to your question is yes, there is a deadline to deliver your preliminary notice in California. As Mr. Wolff said in the above response, notices must be sent within 20 days of first furnishing labor or materials to the project.

BUT, it's important to remember that a notice sent late may be better than not sending a notice at all. I wrote an article a few months ago called "Even Late Preliminary Notices May Be Worth Sending," - the link is below - which talks about how notices sent late in California still have effect, but just a limited effect. They are only effective to protect your lien rights for labor or materials furnished 20 days before sending the notice, and forward.

So, you may not send a notice too late. But, if you miss the deadline and you're still doing work, it may have some applicability.

Who must you send the notice to?

If you contracted directly with the property owner, you need to send the notice only to the construction lender (if there is one). If you contracted with anyone else, you need to send the notice to the construction lender (if there is one), the direct contractor and the property owner.

The bigger question for you, as alluded to by Mr. Wolff, is whether you have mechanics lien rights at all. This boils down to determining exactly what type of work you did at this project, and whether that work qualifies. That can be tricky. I post a lot on our Lien Blog (http://www.lienblog.com), about different types of scenarios and work that qualifies for mechanics lien rights and types that does not. Read about them by clicking the "Scenarios" link below.

Good luck.

My Mechanics Lien Filing Service at www.zlien.com. Our number is 866-720-5436. Avvo's terms and conditions apply,... more
Mahyar Ghassemian

Mahyar Ghassemian

Construction / Development Lawyer - Mission Viejo, CA
Answered

I agree with my colleagues. There are too many factors that need to be considered in this case. You need to speak to a Contruction attorney.

The above information is educational in nature and is provided as a guideline. It is not given as specific legal... more

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