Preliminary Lien Notice Explained
Wondering why you received a Preliminary Lien Notice? Following is information to help answer some of the most common questions regarding Preliminary Lien Notices.
What is the California Preliminary Notice?
The California preliminary 20-day notice is sometimes referred to as the preliminary notice, the pre-lien, the pre-lim, or the 20 day notice. The purpose of the notice is to alert the property owner, the prime contractor, the construction lender and the bonding company of the existence of subcontractors and material suppliers, and that these contractors and suppliers have lien rights. This process is pursuant to California Civil Code 3097, 3098, 3011, 3059.5. In summary it is a merely a notice that the company or person that sent the Preliminary Lien has provided materials or labor to improve your property and could file a lien if they are not paid.
Does this mean that there is a lien on my property?
NO , this is NOT a lien. It is only to inform you that, by law, that the company or person sending the notice has the right to lien the property if your contractor does not pay the vendor or person.
Does this mean that my contractor has not paid his bill?
NO , The preliminary notice is sent to all property owners by law as explained above. This is a standard practice and is not a reflection on the Contractor's integrity and in NO WAY reflects the credit worthiness of the Contractor.
Why is it sent certified mail?
Again, State law requires that the notice be sent certified mail. Note: State law requires an ESTIMATE of the total price of the material / labor furnished or to be furnished to complete the job. Typically this may be as much as 3 times the amount of the first delivery of the material. This would be to cover any extras or additions to the project. Remember this is an improvement to the property so that any claim the vendor or person would ever file would cover the cost of the current and future materials/labor actually provided for the improvement.
I have already paid my contractor and the job is completed, why was this sent?
Once the work of improvement has begun, State law allows 20 days to process the preliminary notice. Occasionally acquiring the information needed to prepare the Prelim Notice takes longer than expected. Also due to billing cycles, there can be a delay between the time you pay the contractor and they, in turn, pay the vendor or person. Due to this time frame the contractor's payment may have crossed in the mail. If you are concerned as to whether your contractor made a payment, you can request a lien release from your contractor.
What can I do to make sure the contractor pays the vendor or person sending the Preliminary Lien Notice?
Upon payment to your contractor, you can request that your contractor provides a release from the Vendor or Person. After the contractor receives payment they can request a release from the Vendor or Person. By law Vendors cannot divulge any payment information about their customers accounts. The contractor must request the release.
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