When to Serve a California Preliminary 20-day Notice Before the Mechanic’s Lien
Most of us by now are familiar with the California Preliminary 20-day notice. It is required as a condition precedent to later recording a California mechanic’s lien for unpaid work. The rule for decades was that only subcontractors and suppliers, persons who do not have a direct contract with the owner, are required to serve the notice. But under what circumstances does someone have a direct contract with the owner?
For purposes of the California mechanic’s lien, it’s easy if you’re dealing with residential construction. Anyone who has a direct contract with Mr. or Mrs. Smith is considered an original or general contractor by statute and the California notice not required. But what about other projects?
There are the gray areas that will only give you grief. What if you have a direct contract instead with the owner’s agent, including that person’s architect, engineer, property manager, or broker? What if the owner has a contract with a general and you are simply doing a side job directly with the owner? What if you are paid directly by the owner but take directions from the general contractor?
Don’t take any chances – if you are a sub or supplier, serve the Notice on the owner, the general contractor, and construction lender. After all, this is the first thing that the attorney for the owner will use as a defense against your California mechanic’s lien.