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Complete Guide To California Preliminary Notices

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Comprehensive guide to California's preliminary notice requirement for contractors, subcontractors and suppliers, published by the nation's premiere mechanics lien and preliminary notice service, …

Comprehensive guide to California's preliminary notice requirement for contractors, subcontractors and suppliers, published by the nation's premiere mechanics lien and preliminary notice service, Zlien, and prepared by California attorney and mechanics lien guru Scott Wolfe Jr. This slidedeck takes you through who is required to send California preliminary notices, how to send them, when they are due and even provides a link to download free preliminary notice forms.The presentation also addresses common issues confronting potential lien claimants.

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Transcript

  • 1. California’s Preliminary Notice
  • 2. WIKIPEDIADEFINTION[A] notice sent by the contractor,subcontractor, materialmen, equipmentlessors or other parties to a constructionproject not to create a Mechanics lien butrather to establish a right to file aMechanics lien. http://en.wikipedia.org/wiki/Preliminary_Notice
  • 3. WHYCOMPLY• Preserve Right To Lien If you’re required to send a preliminary• Avoid Fines notice, and you don’t, your without lien• Prioritize Your Account rights. Period.
  • 4. WHYCOMPLY• Preserve Right To Lien You’re required to send by law and can• Avoid Fines be fined if you don’t send your preliminary• Prioritize Your Account notice. §8216
  • 5. WHYCOMPLY• Preserve Right To Lien Preliminary notices prioritize your• Avoid Fines accounts over those who didn’t send• Prioritize Your Account preliminary notice.
  • 6. WHO MUST SEND CALIFORNIA’S ?PRELIMINARY NOTICES
  • 7. DIRECTCONTRACTORS Direct Contractors are contracted directly by i the property owner to perform the work. Construction lender means (a) A mortgagee i or beneficiary under a deed of trust lendingMust send funds which the cost of all or part of a work of improvement is to be paid; (b) an escrowpreliminary notice holder or other person holding funds provided by an owner, lender or anotherto construction person as a fund for which the cost of all or part of a work of improvement is to be paid.lenders, or lienrights are forfeited.
  • 8. SUBCONTRACTORS Subcontractors are those contractors without a i direct contract with the property owner.Must send to:• Property Owner• Direct Contractor• Construction Lender
  • 9. MATERIALSUPPLIERS Material Suppliers provide materials or i supplies that are used in the work.Must send to:• Property Owner• Direct Contractor• Construction Lender
  • 10. LABORERSEXEMPT Laborer is person, acting as an employee, i performing labor to the work of improvement.Laborers are exempt from California’spreliminary notice requirements.
  • 11. RULEEXCEPTIONS i Exceptions to California’s Preliminary Notice Rules are all based on unique factual circumstance and will therefore differ from situation-to-situation.“Actual Knowledge” by the property ownerof the lien claimant’s participation in theproject may excuse the claimant fromsending notice. Extent of property owner’sknowledge and time it was acquired issignificant. Truestone, Inc. v. SIMI West Industrial Park II 163 Cal.App. 3d 715 (Cal. App. 2d 1984)
  • 12. WHEN TO SEND YOUR CALIFORNIAPRELIMINARY NOTICE ?
  • 13. TWENTYDAYS Send within 20 days of first furnishing to project. Late notices are effective for all furnishing within 20 days of sending, and beyond.20 DAYS
  • 14. TWENTYDAYS Count back 20 Days. Your Lien Rights Are Protected From Then Forward. you start noticefurnishing sent20 DAYS
  • 15. HOW TO SEND YOUR CALIFORNIAPRELIMINARY NOTICE ?
  • 16. CERTIFIEDMAIL You can also send preliminary notices by i personal delivery.May be sent by:• Certified Mail• Registered Mail• Personal Delivery• Overnight Delivery
  • 17. PROVEITi Sending preliminary notice is not enough! Proof that notice was given shall be made by a proof declaration. §8118
  • 18. THEFORMDownload California Preliminary Notice Form
  • 19. THE LITTLE THINGS KILL
  • 20. LITTLETHINGS• Who is the Owner? Do you really know who owns the• Who Is The Lender? property? Mess up and send to the• What Type of Project? wrong person, kaboom goes your• Keeping Track lien rights. http://zlien.us/Ru7w3q
  • 21. LITTLETHINGS• Who is the Owner? Does the project have a lender? It’s• Who Is The Lender? important to know or to request this• What Type of Project? information. Failures here can be costly.• Keeping Track http://zlien.us/NxpE5Y
  • 22. LITTLETHINGS• Who is the Owner? Is it a private or a state project?• Who Is The Lender? Knowing the project type means knowing• What Type of Project? what to send and to who.• Keeping Track
  • 23. LITTLETHINGS• Who is the Owner? Thinking sending notice is hard? Track• Who Is The Lender? the mailings, the notices and the• What Type of Project? declarations, because you’ll need all of this,• Keeping Track and need to resend rejected mailings.
  • 24. GETSMART