by Dale Ortmann, Esq.
Part 1 of a 6-part series on the new Mechanic’s Lien Laws, effective July 1, 2012
As most of you know, service of a Preliminary Notice is required for subcontractors and material suppliers (and the direct contractor) to have Mechanic’s Lien, Stop Payment Notice and Payment Bond rights.
As part of the new comprehensive change to the Mechanic’s Lien laws, effective July 1, 2012, the required Preliminary Notice form has changed. If the correct Preliminary Notice form is not used, your job rights may be forfeited. Along with other minor formatting changes, the new form advises the owner that it must serve any notice of completion or notice of cessation upon the party who served the Preliminary Notice. The following language has been added:
“If you record a notice of cessation or completion of your construction project, you must within 10 days after recording, send a copy of the notice of completion to your contractor and the person or firm that has given you this notice. The notice must be sent by registered or certified mail. Failure to send the notice will extend the deadline to record a claim of lien. You are not required to send the notice if you are a residential homeowner of a dwelling containing four or fewer units.”
Another new requirement is that if a Preliminary Notice is given by a subcontractor that has not paid all compensation due to a laborer, the notice shall include the name and address of the laborer and any person or entity to which a portion of a laborer’s compensation is payable (e.g., a union trust fund).
Proper service of the Preliminary Notice is just as critical as using the correct form. The new law also requires a new proof of notice declaration in place of the former proof of service affidavit. These requirements will be discussed next week in part 2 of this series.
The new Preliminary Notice form is obtainable at www.huntortmann.com.
As an added bonus, Hunt Ortmann is offering free in-house seminars regarding the new changes in the law to any interested company. Please click this link for more information regarding this offer: Lien Law Seminar Invitation
Dale Ortmann is a Shareholder with Hunt Ortmann, a leader in California construction law and Mechanic’s Lien issues. If you have any questions about this bulletin or the changes regarding the new Mechanic’s Lien Law or Preliminary Notice Form, please contact him at ortmann@huntortmann.com.