The Rules and Timelines for California Preliminary Notices and Mechanics Liens

In California, sending a preliminary notice and filing a mechanics lien are essential steps for protecting contractors’ and suppliers’ rights to payment. However, it’s important to follow the specific timelines and rules to ensure that your lien rights remain valid. Below is a breakdown of these key rules and timelines.

Preliminary Notice Requirements

A preliminary notice must be sent within 20 days from the start of the project, not from its completion, which is a common misunderstanding. The notice informs property owners, general contractors, and lenders that you are working on the project and that you expect to be paid for your work.

Who Needs to Send a Preliminary Notice?

Contractors, subcontractors, and suppliers who don’t have a direct contract with the property owner are required to send a preliminary notice. This includes anyone providing labor, materials, or services for a construction project. If you are unsure of your customer’s relationship to the owner of the project, it never hurts to submit a preliminary notice just to be sure – “when in doubt, send it out.” Direct Contractors must also send a notice when a lender is present. Not sure if a lender is involved? CNS can help you find out.

When Should the Preliminary Notice Be Sent?

The notice must be sent within 20 days of starting work or delivering materials. If you miss this 20-day window, you can still send the notice, but you will only be able to file a mechanics lien for work done within the last 20 days before the notice was sent. Any earlier work won’t be covered.

Mechanics Lien Timeframes

After completing your work, if payment issues arise, you have the right to file a mechanics lien. However, there are strict deadlines based on whether a Notice of Completion or Cessation has been filed by the property owner:

For General Contractors (Direct Contractors – contracted directly with the property owner):

  • You have 90 days after project completion to file the lien.
  • If a Notice of Completion is filed, the deadline shortens to 60 days from the filing of that notice.

For Subcontractors and Suppliers:

  • You have 90 days after project completion to file the lien if no Notice of Completion is filed.
  • If a Notice of Completion is recorded, you must file the lien within 30 days of that notice.

Enforcing a Mechanics Lien

Once a lien is filed, it must be enforced (via a lawsuit) within a certain period, or it will expire:

  • In California, a lien must be enforced within 90 days of filing. If the lien is not perfected within this timeframe, it becomes unenforceable, and the contractor or supplier may lose the right to payment through the lien process.

Common Misconceptions

Many contractors mistakenly believe they have 20 days from project completion to send the preliminary notice. In reality, the clock starts ticking from the beginning of the project. Missing this window can jeopardize lien rights for early work.

Conclusion

California’s rules for sending a preliminary notice and filing a mechanics lien involve strict timeframes, making it crucial for contractors and suppliers to be diligent. Failing to send a preliminary notice within 20 days of starting a project or missing the lien filing deadlines can lead to the loss of lien rights and the ability to secure payment. Working with an experienced service provider, like CNS, can help ensure compliance with these time-sensitive requirements.

For assistance with preparing and sending preliminary notices or filing mechanics liens, contact CNS today at 800-366-5660.

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.