Sending a California preliminary notice is an effective way to speed up payment on a construction project. A preliminary notice is an informational document typically sent to the property owner near the beginning of a construction project. Here's what you need to know about the rules and requirements for sending preliminary notice in California.
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General contractors in California must send preliminary notice if the job has a lender on it.
General contractors in California must send a preliminary 20-day notice if the job has a lender on it. The notice must be sent to the lender. GCs must send this notice within 20 days from the start of the job.
On public projects in California, General Contractors are not required to send preliminary notice.
Since GCs will not make a claim against their own bond for non-payment, they do not have bond claim rights, and have no preliminary notice requirement.
Subcontractors and suppliers must send notice.
California subcontractors, material suppliers, and equipment lessors must send preliminary 20-Day notices to the owner, prime contractor, and lender (if any). The notice must be sent within 20 days of first providing materials or labor.
Subcontractors and suppliers must send notice.
On public construction projects, California subcontractors, material suppliers, and equipment lessors must send preliminary 20-Day notices to the public agency in charge, the prime contractor, and surety (if any). The notice must be sent within 20 days of first providing materials or labor.
TopicThese are some frequently asked questions about the California preliminary notice process, with answers written by construction lawyers and payment experts in California.
A California preliminary notice is a legal document sent on construction projects to provide information to the people in charge of payment. It is also known as a 20-day notice, because it must be sent within 20 days of first furnishing labor or materials to the project. California’s preliminary 20-day notice protects the right of the sender to file a mechanics lien or bond claim if they are not paid.
Preliminary notices are used widely in construction. Most states require contractors and suppliers to send these notices in order to protect their lien rights.
Yes. California law requires almost everyone to send preliminary notice prior to recording a mechanics lien, giving stop payment notice, or making a claim against a payment bond.
Two specific parties are exempt from California’s notice requirements:
For full protection, California requires preliminary notice to be served no later than 20 days after the claimant has first furnished labor or materials. A lien claimant who failed to provide notice within 20 days of first providing labor or materials may provide the notice at a later date. However, they will only retain lien rights for materials or labor furnished within the 20 days preceding the late notice, as well as any contributions thereafter.
Keep in mind that California allows contractors and suppliers to send notice early. You can even send preliminary notice before you ship materials.
California requires preliminary notice in order to preserve your right to file a mechanics lien. Sending notice late will reduce the amount that you can claim in a lien. For example, sending preliminary notice today will allow you to file a claim for any work or materials you provided in the last 20 days.
However, if it’s been more than 20 days since you provided labor or materials, and you forgot to send preliminary notice, you won’t have the right to file a lien for those amounts.
If you don’t provide a preliminary notice at all, you will not have the right to file a lien in California.
If you miss the required date, all is not necessarily lost. California prelims can be sent late…but not too late.
California prelims can be sent late, but will only retain lien rights for materials and/or labor furnished within the 20 days preceding the late notice, and the labor and/or materials provided thereafter.
A notice should be filed, even if it is late, because the failure to provide a notice at all is absolutely fatal to a California mechanics lien.
California law is specific about how to deliver notice. A preliminary 20-day notice must be sent by registered or certified mail, express mail, or overnight delivery by an express service carrier. Return receipt requested is not required.
As described in our comprehensive write-up on the different methods of sending preliminary notice, it’s generally not a good idea to send notices by “return receipt requested” unless you are absolutely required to. For many of the same reasons, you should not deliver your CA prelim by hand.
While delivering by hand may technically be allowed, it has problems. The main problem is proving that you delivered it.
A key part of sending preliminary notices in California is to make sure you can prove you’ve sent it. And more specifically, that you have the proof required by the statutes. This proof is called a “Declaration of Delivery.” You may also want to refer to What you need to keep track of when sending preliminary notices.
In order to protect lien rights on private construction projects in California, the preliminary notice must be served on the:
If there is a tenant on the property, you may also want to consider sending a notice to the tenant.
In order to retain bond claim rights on a public construction project, California’s preliminary notice must be given to the:
Finding information for each of these parties on a project can be difficult. You have the right to request this information from the party who hired you. By making the requests, you are protecting yourself. The best practice is to just make the request, and do as much diligence as possible.
While there is no requirement that a California preliminary notice be recorded, it does have a potential advantage. California law specifically allows a construction participant to file a 20-day preliminary notice with the county recorder for the county in which the project is located.
If the preliminary notice is filed, the county recorder’s office is required to inform the filing party if a notice of completion or cessation is filed with respect to the project. This can be useful for determining deadlines for retainage payments or mechanics lien filings.
In California, the preliminary notice must be sent within the 20-day notice period. Actual delivery is not required within the period. The requirement is considered met if properly sent within the period.
This is made explicit within California’s Code §8116, which provides that preliminary notice is “deemed to have been given…when deposited in the mail” in the appropriate manner.
First of all, you’re not alone: Preliminary notices are received by construction lenders, owners, developers, and contractors every day across California. You might start by thanking the party who sent it, since receiving preliminary notice is a really good thing.
There’s nothing specific you have to do next. Make note of everyone identified on the notice, when it comes time for payment to flow on the job, you’ll need to track lien waivers from all these parties;
If something is wrong on the notice, you may want to follow up and get it corrected. If you received the notice through Levelset, look up your document right here.
Most likely your best course of action at this point would be a demand letter and potentially a breach of contract action against the GC who has not paid you. If there is a payment bond on the project your may still have time to make a claim against this bond. But otherwise, because you did not send preliminary notice, you would not have lien rights.
Answered by Peter Ryan | Partner https://www.levelset.com/payment-help/question/how-do-i-get-prelim-info/Generally you would get it from your contract or your customer. Levelset can assist in researching the project to get this information as well. This is more important when there may be a lender and you are not sure who the owner is. You also should be able to get owner/lender information from the county recorder and/or a title company.
Answered by Peter Ryan | Partner https://www.levelset.com/payment-help/question/can-the-prelim-have-a-different-name-from-the-lien/I forgot to add another important point. We currently have 2 different entities set up in Levelset; entity "A" and entity "X". The dba "B" will be created under entity "A" and we intend to use this dba for both entities going forward.
Answered by Lynn Lee | AgentCalifornia 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.
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:
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.
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 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.
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.
