It’s a short question with a long important answer that will impact licensed contractors throughout the State of California. While every Capitol Connection is a ‘must read’ for contractors, this is information you absolutely don’t want to miss…
Q: I regularly read your column in my local Builders Exchange’s Construction Weekly and I appreciate your insight. My attorney informed me that, as of July 1st, there would be new preliminary notice forms and requirements for both private and public works. Are you aware of this?
A: Your attorney is correct. Effective July 1 of this year, there will be some significant changes to the 20-day notice requirement and for that matter the requirements for home improvement contracts and “mechanic’s lien” laws. A review of the 2012 License Law and Reference Book includes two sets of laws: one, which is operative until July 1, 2012, and the second that becomes effective on the same day.
Presently, the “preliminary 20-day notice (private work)” is addressed in Civil Code Section 3097, which will be repealed on July 1, 2012. Not being able to locate the new code sections in the same License Law and Reference Book, we turned to a trusted former CSLB employee, Michael Brown, who worked on this type of state legislation. In its place the State added an entirely new group of code sections (civil code 8200-8216) that deal with the new preliminary notice. Included below are a few EXCERPTS from these new Sections. For the entire wording, we have put a link on our web site (www.cutredtape.com).
As with any lien or notice issue, it is critically important that you meet all the deadlines and procedures prescribed by law. Because of the large volume of information AND STRICT REQUIREMENTS, we highly recommend consulting a construction attorney with a background in mechanic lien laws.
CA Civil Code 8200. (a) Except as otherwise provided by statute, before recording a lien claim, giving a stop payment notice, or asserting a claim against a payment bond, a claimant shall give preliminary notice to the following persons: (1) The owner or reputed owner; (2) The direct contractor or reputed direct contractor to which the claimant provides work, either directly or through one or more subcontractors; (3) The construction lender or reputed construction lender, if any.
(b) The notice shall comply with the requirements of Chapter 2 (commencing with Section 8100) of Title 1. (c) Compliance with this section is a necessary prerequisite to the validity of a lien claim or stop payment notice under this title…
CA Civil Code 8204: (a) A preliminary notice shall be given not later than 20-days after the claimant has first furnished work on the work of improvement. If work has been provided by a claimant that did not give a preliminary notice that claimant shall not be precluded from giving a preliminary notice at any time thereafter. The claimant shall, however, be entitled to record a lien, give a stop payment notice, and assert a claim against a payment bond only for work performed within 20 days prior to the service of the preliminary notice, and at any time thereafter….
As always, call with any questions and Shauna or I will help you get this figured out.