Preliminary Notice

Question:

We are working on a project and received a change order notifying us that the owner has changed. Should we send a revised preliminary notice? We are in California and already passed the 20 day deadline. Does the change in owner impact the validity of the notice? Could we still file a lien against the original owner if there are payment issues? Or do we need to actually revise the notice to include the new owner in order to maintain our rights?

The first inquiry would be whether you were required to send a preliminary notice. Typically, parties contracting directly with the property owner (typically the prime or general contractor) do not have to send a preliminary notice. If you are a subcontractor or material supplier, or did not contract directly with the property owner, you were probably required to send one.

Answer:

If you are required to send a preliminary notice, do so right away. Send one to the prior and current owners to be safe. A notice can be filed at any time during the project. The catch, though, is that it only protects work performed up to 20 days before it is served. If the project is long finished, it probably will not protect you. But, if the project is ongoing or recently completed, it’s always a good idea to get the notice served.A mechanic’s lien will attach to the property itself – it is a lien on title. So, you may proceed with your mechanic’s lien if required. The new owner may have an argument that the prior owner should pay for the lien. A safe approach would be to name both prior and current owner, as you will not know what (if any) arrangement was made between the two related to assignment of any project debt.Even if you missed your notice window and cannot file a mechanic’s lien to protect the debt owed to you, you can always consider a standard breach of contract claim against any party that owes you money.