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Can we include an un-approved change order amount in our Preliminary Notice?

We are issuing a Preliminary Notice to our customer that we are currently working with. However, we have a change order that is approved by our customer, but not theirs (the owner). Can this amount be added to the original contract amount and included in the Notice?

1 reply

Jan 3, 2020

I'm assuming this is a commercial project, as the required notices for Virginia residential projects (Notice to Mechanics Lien Agent) doesn't require a contract amount.

Virginia preliminary notices on commercial projects (§43-11 Notices)

These types of Virginia preliminary notices are particularly unique compared to other states, as they are a two-step process. One is provided at the beginning of the project and one is provided post-work. Both of these notices require some sort of contract amount to be included.

§43-11 preliminary notice

However, for the preliminary notice, under VA Code Ann. §43-11, the subcontractor is only required to "state the nature and character of the contract and the probable amount of his claim." This merely requires a the contract price or a good-faith estimate of the the amount. Including unapproved change order amounts may be a good faith estimate, but excluding the value of the change order will not affect the extent of lien rights at the end of the project; and ultimately might be the safer play.

§43-11 post-work notice

When the specific (full) contract amount comes into play is when filling out and serving the post-work notice. The statute states that the second notice shall state the "correct amount, verified by affidavit." The amount stated on this second "post-work" notice will determine the extent of the mechanics lien rights. For more information, you may want to read our Virginia Preliminary Notice Guide

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