The Preliminary Lien Notice Should Have the Correct Dollar Amount
There must be a price, as accurate as possible, included on every preliminary notice form
QUESTION:
On any preliminary notice, is there a requirement to
list the estimated total price of the labor, services, equipment or
materials?
In other words, can you file a preliminary notice
without listing a price? If so, what purpose would it serve to exclude
the price of materials, labor, service and equipment?
Joyce, MCS Construction, Clovis CA
 |
Preliminary Lien Notices / Pre-Liens Word and PDF versions
Construction-Business-Forms.com |
ANSWER:
All preliminary notices must state an estimate of the value of the labor, equipment, materials, etc. to be provided.
Sometimes
it is difficult to come up with an estimate of the cost. The claimant
must make a reasonable effort to inquire into the quantity of
work/materials to be provided, and from that inquiry the estimate should
be determined and stated on the preliminary notice.
The price of
a subcontract is almost always going to be adequate as an estimate
amount. For an open-ended purchase order for materials, the customer
should be asked to estimate the total value of materials to be provided
to the project, and that information should be documented by the
claimant (to prove that a reasonable inquiry was made) and the estimate
amount should be based on the information obtained.
Remember that
an estimate does not need to be accurate for the preliminary notice to
be valid. The only requirement is that a reasonable inquiry be made by
the claimant before the preliminary notice is prepared.
If a claimant learns that its estimate in its preliminary notice was way too low, a new preliminary notice is almost always a BAD
idea because it creates confusion and might give the owner and GC an
argument that the second preliminary notice is the one that matters and
it was served too late.
A letter to the owner notifying the owner
of the increase in charges might be a good idea in some cases to make
sure the owner is aware of the increase, but no steps like this should
be taken without having a construction attorney look at the individual
facts of a particular situation.
--
Thank you to Dave Barnier for the above information. :) Mr. Barnier is a practicing litigation attorney in San Diego CA and can be reached at 619.682.4842.
The information in this article is based upon California law current at the time of writing and is provided for general information, only. The information provided illustrates laws and legal principals in general. Any information or analysis presented in this article is intended solely to educate the reader on general issues. A comprehensive review of facts, documents, and applicable laws is always required before any attorney can competently provide any legal advice regarding any particular situation. In short: Please do not rely on any part of this article when analyzing any specific situation affecting you or your business.
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Article Series: Preliminary Lien Law
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California 20-Day Preliminary Lien Notices
Construction-Business-Forms.com |
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California 20-Day Preliminary Lien Notice
Construction-Business-Forms.com |
Preliminary Notices and Dollar Amounts
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Amending a Preliminary Lien Notice
Is it better to amend the notice, or issue a new one?
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California 20-Day Preliminary Notices
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
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California 20-Day Preliminary Lien Notices
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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