20 Facts About California’s 20 Day Preliminary Notice
Need to serve a preliminary notice in California? (aka CA 20 Day Prelim) The general rule, when supplying materials or services to a construction project in California, is to serve the preliminary notice within 20 days from first furnishing. However, there are nuances based on who you sold to within the ladder of supply and whether you are supplying to private project or public project.
Are you supplying to a California Private Project?
If you are supplying to a private project and want to secure mechanic’s lien or stop notice rights, you should:
1. When contracting directly with the owner, serve the notice upon the lender within 20 days from first furnishing materials or services.
2. When contracting with all others, serve the notice upon the owner, prime contractor and lender within 20 days from first furnishing materials or services.
“What if My Notice Is Late?”
3. You may serve a late notice, but the lien will only be effective for materials and services provided 20 days prior to serving the notice and thereafter.
Are you supplying to a California Public Project?
If you are supplying to a public project and want to secure bond claim or stop notice rights, you should:
4. When contracting directly with the prime contractor, no notice is required
5. When contracting with all others, serve notice upon the prime contractor and the public entity within 20 days from first furnishing materials or services.
“What if My Notice is Late?”
6. A late notice may be served, but the bond claim, when later served, will only be effective for materials and services provided 20 days prior to serving the notice and thereafter.
“Wait, the Notice isn’t Required?!”
7. Correct, there may be circumstances when the preliminary notice may not be required. But, just because you don’t have to do something, doesn’t mean you shouldn’t. A great best practice is to serve a notice, regardless of your position in the ladder of supply (well, except… see #8) – it’s better for everyone to know you are supplying to the project.
8. Serving the notice upon all parties is a good idea, but if you are contracting with the owner on a public project, you do not have bond claim or stop notice rights.
What Information Should Appear within the California 20 Day Notice?
According to California Civil Code (Title 1, Chapter 2 Notice 8100-8118), the following information should be included in the notice:
9. The name and address of the owner (or reputed owner)
10. The name and address of the direct contractor
11. The name and address of the construction lender
12. The name and address of the claimant (the entity serving the notice)
13. Identify where the claimant falls within the ladder of supply
14. Identify the claimant’s customer
15. The project address:
“A description of the site sufficient for identification, including the street address of the site, if any. If a sufficient legal description of the site is given, the effectiveness of the notice is not affected by the fact that the street address is erroneous or is omitted.” – (8102.4)
16. A general description of the materials or services being provided
17. The contract amount
18. The claim amount
Serve the 20 Day Notice
Don’t just throw a stamp on the envelope & drop it in the mail!
19. In California, the notice should be served via “…registered or certified mail, express mail, or overnight delivery by an express service carrier.” – (8110)
Conservatively, NCS recommends you calculate your mechanic’s lien/stop notice deadlines based on your last furnishing date. In California, statute dictates these deadlines are calculated based on the date of Completion or the date a Notice of Completion is filed, unfortunately, not all project owners file this notice when the project is completed.
The owner must notify the prime contractor and any claimant who has served a 20-day notice that a notice of completion or cessation has been filed within 10 days of its filing (commercial projects). The mechanic’s lien/ private stop notice period will not be shortened by the filing of the notice of completion or cessation if the owner fails to notify you.
Are you supplying to a California Federal Project?
Then these rules don’t apply to you!
20. When supplying materials or services to a federal project, regardless of the state in which the project is located, there is no required preliminary notice.
This is not an exhaustive list of the “do’s & don’ts” or the “should’s & shouldn’ts”, it’s just a simple overview of the preliminary notice in California.