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20-Day Preliminary Lien Notice aka Pre-Lien

By Diane Dennis

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The Owner Paid Your Customer But ... Your Customer Didn't Pay You!

What to do?

This is where we say thank goodness for (properly served) the 20-day preliminary lien notice!

• Require lien releases/waivers

• Pay bills with joint checks

• Place phone calls to the creditors to verify that they have indeed been paid; etc.

That's why you still file a lien even though the Owner paid, because the Owner didn't do what he was supposed to do, which was to make sure that you got paid.

He can't say that he didn't know you were owed money, because you have proof (the proof is explained a bit further on) that he did indeed receive your 20-day preliminary lien notice which told him that you are present on the job.

True Story...

There was a subcontractor who didn't get his last two payments. He tried several times to contact the general but he couldn't get an answer or a call back. This was 20+ years ago.

He finally reached out to the Owner of the project. He was nervous to do it but there really wasn't any other way at that time to find out what was going on.

He reached the Owner and come to find out the general had already been paid in full on the project. The sub was realizing that the general had split with his money (turns out he did it to a couple other subs as well).

Through some brief free legal help he found out that because he had done his preliminary lien notice properly, including the copy to the owner, he still had mechanic's lien rights even though the Owner had paid once already.

Ultimately, it's the Owner's responsibility to make sure everyone is paid. Yes the Owner got ripped just like the subs did but he had control over those payments whereas the subs did not.

The importance of 20-day preliminary lien notice

Preliminary Lien Notices / Pre-Liens Word and PDF versions Instant Download Unlimited Usage Unlimited Free Replacement Unlimited Free Support Includes Exclusive, In-Depth Help: Learn Exactly How to do the California Preliminary Notice! Construction-Business-Forms.com

The importance of processing the 20-day preliminary lien notice in a timely manner cannot be over-emphasized

No ifs, ands, or buts about it, the preliminary lien notice MUST be mailed out within the time allowed by the law.

Lien rights are often lost due to the mistake of sending a late 20-day preliminary lien notice.

The time-frame varies from state to state, so you must check to see what the requirement is in the state the job is located in.

Couple examples: It's my understanding that in one state the 20-day preliminary lien notice must be processed within 8 days of the first shipment or incurring of labor costs, whichever applies to your situation.

I'm told that a couple other states require that the notice be processed before the first shipment or incurring of labor costs.

No matter which state your company might be located in, you need to follow the prelim laws for the state that the project is located in.

California contractors and suppliers have up to 20 days after the date that work starts or material is supplied. The lien statutes in most states must be followed precisely, courts do not afford much latitude with respect to timelines and compliance with statutory forms.

For contractors, this means you've got to process and mail the 20-day preliminary lien notice within 20 days of the first day you either start work or supply material to the project (or place the material order if it's a special order item).

For material suppliers, this means within 20 days of the first day you supply material to the project (or order it if it's a special order item).

The 20-day preliminary lien notice covers all work, material, etc. for up to 20 days prior to the postmark date on the mailing of the preliminary lien notice.

So, if you've been on the job for 30 days and are just now sending the preliminary lien notice, you'll be covered for 20 days back (or from after the first 10 days forward).

You do still want to do the preliminary lien notice even if you're late. If you don't then you won't have lien rights for the balance of the project.

Here's that proof that the Owner knew you were there

When you send preliminary lien notices you'll want to send it via certified mail *return receipt*.

You're sending the notice via certified mail because you have to have proof of when you sent it. But that doesn't tell you for a fact that it arrived where you sent it to.

When the recipient receives the mail he's required to sign for it before he can have it, but you won't have proof that it was received by the correct person without the return receipt.

When you're in court and the Owner is telling the judge that he didn't get your notice you'll have proof he did because of the return receipt that has his signature, or the signature of his agent.

Maybe even more importantly, you'll know way in advance if the Owner didn't receive it because you won't have the return receipt. That's a red flag that you need to find out what happened to the notice.

Because the Owner has the 20-day preliminary lien notice from you he can't state that he didn't know you were present on the job.

That's why you file the mechanic's lien. Legally you did everything that you could, everything you were supposed to do. Because you made the Owner aware that you were present, the responsibility then shifted to him to make sure you were paid.

Article Series: Preliminary Lien Law

California 20-Day Preliminary Lien Notices Word and PDF versions Instant Download Unlimited Usage Unlimited Free Replacement Unlimited Free Support Exclusive, In-Depth, "Exactly How To Do The California Preliminary Notice" Article! Construction-Business-Forms.com

Preliminary Notices and Conflicting Addresses

If the address on the Grant Deed is different than the address on the prelim information given to us by the General Contractor, who do we send it to?

Nevada Notice of Right to Lien & Request for Notice of Completion

The Who, What, When, Where, Why, and How - not necessarily in that order :o)

The California Preliminary Notice Covers Up to 20 Days Back

Just because you missed the deadline doesn't mean that all is lost!

Preliminary Lien Notice Research

A preliminary lien notice won't do you any good if they don't go to the correct entities.

California preliminary notice, Supplier didn't do one...

Unfortunately, a prelim is required to file a lien, even if you're a supplier.

Arizona Preliminary Liens

Arizona requires preliminary liens prior to mechanic's liens.

General Contractor Was Paid But He Won't Pay Sub

What should you do? Do you still have lien rights?

California mechanic's lien laws, preliminary notices, and change orders

Do you have to do a preliminary notice for change orders?

California Preliminary Notice & Architectural Fees

I am an architect who is having difficulty with the final payment of fees...

When a Preliminary Lien Notice is Refused

Did someone refuse your preliminary lien notice?

Preliminary Liens When There's More Than One Location

The potential ramifications of using one preliminary notice for several locations when they're all under the same contract

California 20-Day Preliminary Lien Notice Word and PDF versions Instant Download Unlimited Usage Unlimited Free Replacement Unlimited Free Support Includes an Exclusive, In-Depth, How-to Article! Construction-Business-Forms.com

Preliminary Notices and Dollar Amounts

Make sure the $ amount on the prelim is as accurate as possible

Preliminary Liens and Non-Responsibility

Why you should serve the owner with a prelim even if he posts a notice of non-responsibility

Preliminary Notices and Signatures

Can the signature on a preliminary notice be a copy/fax or must it be 'wet'/original?

Amending a Preliminary Lien Notice

Is it better to amend the notice, or issue a new one?

California 20-Day Preliminary Notices Word and PDF versions Instant Download Unlimited Usage Unlimited Free Replacement Unlimited Free Support Includes an Exclusive, In-Depth, How-to Article! Construction-Business-Forms.com

Serving the Wrong Party

When working in Arizona be sure to timely serve the preliminary notice *to the correct parties* or there could be trouble

Getting 'Stiffed' on the Job

Preliminary liens can help save you from being 'stiffed' on the job!

Property Records are your Friend

Research property records when doing your preliminary notices

Outsourcing your Preliminary Liens

Thoughts about using a company that handles your preliminary notices for you

Preliminary Liens - a detailed, step-by-step outline

A detailed step-by-step explanation of how to process preliminary notices

Preliminary Liens

Tracking the paperwork, the proof of service, and the USPS documents for prelims

California 20-Day Preliminary Lien Notices Word and PDF versions Instant Download Unlimited Usage Unlimited Free Replacement Unlimited Free Support Includes an Exclusive, In-Depth, How-to Article! Construction-Business-Forms.com

Preliminary Liens and Notifying the Correct Parties

Make sure your prelims go to the correct entities

Mishandling of, or Not Processing, Preliminary Liens

Mishandling of, or not processing, preliminary liens is one of the top 10 mistakes contractors make

At one time the California preliminary notice form was mandated by California to be titled "20-Day Preliminary Notice Form" (exactly, word for word). The California mandate has since changed and the form is now known as the "Preliminary Notice Form" (again, exactly, word for word). Make sure what your state requires and make sure your forms are valid.

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