Running the Business · Part 3
Mechanics liens I: the 20-day preliminary notice. Miss it, lose your rights
A mechanics lien is the strongest collection right a contractor has, a claim recorded against the property itself, and for anyone who did not contract directly with the owner it depends on one piece of paper sent in the first twenty days of the job: the preliminary notice. No notice, no lien, no stop payment notice, no bond claim. This lesson explains who must send it, to whom, by when, what it must say, how it must be delivered, and the one habit that makes it automatic. It also explains why the direct contractor on a residential job usually does not need to send it, and the one case where they do.
What the full lesson covers
- If you did not contract with the owner (you are a subcontractor, or a supplier), you must give a preliminary notice to the owner, the direct contractor, and any construction lender before you can record a lien, give a stop payment notice, or claim on a payment bond (Civil Code 8200).
- Give it not later than 20 days after you first furnish labor or materials. A late notice protects only the work furnished in the 20 days before it and afterward (8204).
- If you contracted directly with the owner, you need only give it to the construction lender, if there is one. No lender, no notice required for your own lien.
- Contents: the parties, the site by street address, your name and relationship, a general description of the work, an estimate of the total price, and the boldface "NOTICE TO PROPERTY OWNER" statement, verbatim (8102, 8202). Deliver by personal delivery or by registered, certified, express, or overnight mail (8106, 8110), and keep the proof.
- Send it on day one of every subcontract job, as routine, and tell your own customers when your supplier will send one to them.
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More lessons in Contracts and Getting Paid
- 1The home improvement contract (B&P 7159): every required element, the exact notices, and the three-day right to cancel
- 2The deposit cap: $1,000 or 10 percent, whichever is less, and progress payments that cannot exceed the work. CSLB's most common citation
- 3Service and repair contracts (B&P 7159.10): when the short form applies, what it must say, and how a service call falls out of it
- 4Subcontracts with GCs: the twelve clauses to read, what to strike, and what to negotiate
- 5Change orders: written, signed, before the work. Every time. Why verbal ones end in CSLB complaints
- 6Mechanics liens I: the 20-day preliminary notice. Miss it, lose your rightsYou are here
- 7Mechanics liens II: recording deadlines, the 90-day foreclosure clock, the four statutory release forms, stop payment notices, and payment bonds on public work
- 8Collections: demand letter, lien, small claims, attorney. When each is worth it, and the one thing that makes all of them impossible
- 9Taking payment: cards, ACH, checks, cash, financing partners, and getting every dollar into the right account
- 10Case: the job that went unpaid. Where the contractor lost lien rights and how to have kept them
- 11Case: the deposit that became a citation
- 12Case: the change order that was never written
- 13Template: the home improvement contract, with every B&P 7159 notice verbatim
- 14Template: the service and repair contract (B&P 7159.10), one page, with the notices verbatim
- 15Template: the change order, one page, signed before the work
- 16Template: the 20-day preliminary notice, with the proof-of-notice declaration
- 17Template: the four statutory lien waiver and release forms (Civil Code 8132 to 8138), verbatim
- 18Template: the demand letter, homeowner version and general contractor version
- 19Template: the subcontract review checklist. Twelve clauses, three boxes each