California Mechanic’s Lien and Notice of Intent to Lien
Recording a California mechanic’s lien is one of the last steps in the collection process for most of us, but there is another notice it can be sent prior to the recording. It is called a Notice of Intent to Lien. This notice can be found on the California page of National Lien Law.
Some states, including Nevada, require such a pre-lien notice. The purpose is to give the owner a warning shot, usually for 10 days, before the actual California mechanic’s lien is recorded. This hopefully engenders some kind of seriousness with the owner, sets up negotiations, and hopefully will allow you to be paid. The idea is with the threat of filing a mechanic’s lien, the owner would “wise-up” and pay before the recording. In California, there is no statutory requirement of sending that notice. On the other hand, it is still a popular notice and used by many contractors.
The notice is sent certified mail to the owner (it is not recorded) with the statement the mechanic’s lien will be recorded within 10 days if there is nonpayment. It is also a good idea to include a copy of the last unpaid invoice. All the lien claimant’s contact information is in the form so there can be quick communication.
Many times the owner is not even aware of the nonpayment. For example, this applies to subcontractors and suppliers dealing directly with the general contractor. That general contractor may not have told the owner of the nonpayment. On the other hand, the owner may know about that nonpayment, or least suspect same, if a 20-day preliminary notice has been initially sent to the owner. Owners typically collect these notices and then insist that the subs and suppliers sign lien waivers before payment is made.
Another option, which does take additional time, is to accompany the notice with a one or two-page demand letter. That demand letter will outline the services performed, describe any change orders, address potential punch list issues, and generally describe the necessity for payment. Many times when the lien or notice is sent to the owner, they only get one side of the story from either a design professional, construction manager, or general contractor. Putting in writing your perspective helps greatly in being paid.
So in summary, even though the notice of intent to record a California mechanic’s lien is not required, it is recommended. The only exception is if the notice would not accomplish anything, for example the owner has already been contacted multiple times and has refused to pay.
More Info: National Lien Law