The New Preliminary Notice Form: How To Serve It
by Dale Ortmann, Esq.
Part 2 of a 6-part series on the new Mechanic’s Lien Laws, effective July 1, 2012
In Part 1 of this series, we explained the new changes to the Preliminary Notice form, effective July 1, 2012. In this Part 2, we explain changes to how the Preliminary Notice must be served. Failure to properly serve the Preliminary Notice will jeopardize your mechanic’s lien, stop notice and payment bond rights.
On a private job, the Preliminary Notice must be given to the Owner, the “Direct Contractor” (a new term which means any contractor who has a direct contract with the Owner) and to the Construction Lender, if any. Laborers are not required to serve a Preliminary Notice.
Importantly, while direct contractors are still not required to serve a Preliminary Notice on the Owner, all direct contractors must now serve a Preliminary Notice on the Lender, if any. Under former law, a distinction was made between “the Contractor” (e.g., a general or prime contractor), who did not have to serve a Preliminary Notice on the Lender, and all other contractors who directly contracted with an Owner, who were required to serve the Lender. This distinction has been eliminated.
On public jobs, a direct contractor has no obligation to serve a Preliminary Notice. Also, claimants with a direct contractual relationship with a direct contractor is not required to give the Preliminary Notice. A laborer is also not required to give a Preliminary Notice. All others (such as second-tier subcontractors or material suppliers to subcontractors) must give a Preliminary Notice to the public entity and to the direct contractor.
The Preliminary Notice may now be served by any of the following methods:
- By registered or certified mail (the method used by most contractors and suppliers), by express mail, or by overnight delivery by express service carrier. Prior to the new law, service by Express mail and overnight delivery were not permitted.
- By personal delivery.
- By leaving the notice with “the person apparently in charge” at the recipient’s office address and mailing a copy to the same address, or leaving the notice at the recipient’s residence address (in the presence of a competent member of the household) and mailing a copy to the same address. This method of permitted service, commonly referred to as “substitute service”, is new.
In Part 3 of this series, we will discuss how to prove that the Preliminary Notice was properly served and the new “Proof of Notice Declaration”.
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 lien law to any interested company. Check out our Lien Law Seminar Invitation for more information. Please email firstname.lastname@example.org to inquire or schedule this time-sensitive seminar for your company today.
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 email@example.com.