Preliminary Notices – Why the Little Things Matter


Grenade pin

Sometimes the little things matter . . . a lot.

Such is the case with preliminary notices, formerly known as preliminary 20-day notices.

I know, I know. They’re routine. You can prepare them in your sleep. But at the risk of sounding like your mother, let me emphasize, they’re also important – Like good dental hygiene and eating your vegetables (And, yes, that’s a picture of a grenade pin. Like your mother, I can also be prone to over-exaggerated warnings).

So, here’s the ins and outs regarding preliminary notices.

What is a preliminary notice?

A preliminary notice is a legal document which must be served by most subcontractors and material suppliers and, in certain cases, by direct contractors, in order to record a mechanics lien, serve a stop notice, or make a payment bond claim. Failure to serve a preliminary notice may invalidate your right to pursue these statutory payment remedies.

Are there different types of preliminary notices?

Yes, there are two different types of preliminary notices, one for private works of improvement and one for public works of improvement. The statutory required language in each of them is different.

Who is required to serve a preliminary notice?

It depends on whether it is a private work of improvement or public work of improvement:

  1. Private Work of Improvement: Subcontractors and material suppliers of all tiers. And, on lender financed projects, direct contractors.

  2. Public Work of Improvement: Second-tier and lower subcontractors and material suppliers.

A preliminary notice is not required to be served if the work to be furnished has a value of $400 or less. Likewise, laborers are not required to serve a preliminary notice.

Is there a deadline to serve a preliminary notice?

No, but you can’t make a claim for work furnished more than 20 days before serving a preliminary notice.

So, for example, if you first began to furnish work January 1st and served your preliminary notice on January 20th, because a preliminary notice covers work furnished 20 days before, you would be able to make a claim for all work you furnished. If, however, you first began to furnish work on January 1st but did not serve your preliminary notice until January 31st, because a preliminary notice only covers work furnished 20 days before, you would only be able to make a claim for work you furnished since January 11th. Thus, you should always try to serve your preliminary notice as soon as possible after first furnishing work.

What information is required to be included in a preliminary notice?

You can find a preliminary notice (for private works) and a preliminary notice (for public works) under the “Toolbox” menu. But here’s what information is required:

  1. The name and address of the owner (note: the owner may not be the same as the project owner, for example, in tenant improvement projects);

  2. The name address of the direct contractor;

  3. The name and address of the construction lender (if any);

  4. Your relationship to the persons to whom the preliminary notice is being served (e.g., subcontractor to [name of direct contractor]”);

  5. A general description of work you have furnished or will be furnishing;

  6. The location of the project;

  7. The name and address of the party to whom you are furnishing work;

  8. An estimate of the total price of the work furnished or to be furnished;

  9. How the preliminary notice was served (e.g., certified mail, overnight delivery, personal delivery).

Note: The estimate of the total price of the work furnished or to be furnished is usually the amount of your contract.  You don’t need to add a “cushion,” and you really shouldn’t, as it may cause your preliminary notice to be invalid.  You also don’t need to serve a new or amended preliminary notice if the amount of your contract increases or decreases due to change orders or extra work, and while I know some who do, I am leery of the practice since it may create an argument that because the “new” preliminary notice replaces the “old” preliminary notice it only covers work furnished 20 days before.

How do you obtain the names and addresses of the owner and construction lender?

Direct contractors are required to provide the names and addresses of the owner and construction lender. In addition, where a construction loan is obtained after construction begins, the project owner is required to provide the name and address of the construction lender to each person who has served it with a preliminary notice.

Who do you send the preliminary notice to?

A preliminary notice should be served to the owner, direct contractor, and construction lender (if any).

Do you need to record a preliminary notice?

No, but if you record your preliminary notice at the county recorder’s office in the county where the project is located, the recorder is supposed to send you notice if the project owner records a notice of completion or notice of cessation. This is important, because a notice of completion or notice of cessation will reduce the time in which to record a mechanic’s lien or serve a stop notice.

Some, however, feel that this is not important, since the project owner is already required to serve all persons from whom it has received a preliminary notice, with a notice of completion or notice of cessation within 10 days of recording such notices with the county recorder’s office.

What if you are a material supplier and you supply equipment and/or materials under multiple contracts on the same project?

Material suppliers who supply equipment and/or materials under multiple contracts on the same project are required to serve a separate preliminary notice under each contract in which they provide equipment and/or materials.

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