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Date of First Furnishing and Design

Our company designs and manufactures custom metal products for use in construction applications. From my understanding most states have a time limit for delivering a preliminary notice that starts at the date of first furnishing materials or labor. Since our products are custom designed, each project might have 8-12 weeks of design and manufacturing work that occurs prior to anything being delivered to the site. Is the date of first furnishing generally when the design process starts or when the product is delivered on site? And to follow up, if work is stopped and we go unpaid prior to product being delivered to the site do we have any lien rights? A large portion of our work is in California, but we deliver products all over the US.

2 replies

Nov 20, 2018

Those are good questions. First, under § 8204 of the California Civil Code, "A preliminary notice shall be given not later than 20 days after the claimant has first furnished work on the work of improvement." While "work" includes materials, it also includes labor, service and equipment - all of which go into fabricating materials. Further, under § 8050(b), "'work of improvement' means the entire structure or scheme of improvement as a whole..." Thus, because the "work" that goes into specially fabricated materials goes beyond merely dropping materials at the job site, and because this work is part of the "scheme of improvement as a whole" - it would seem that a specially fabricated materials provider should send notice based on when they first begin work for the project. Beyond what may or may not be required - it's generally a good idea to err on the side of caution with California notices in order to fully preserve lien rights, plus the California Civil Code doesn't prohibit sending notice early. Regarding the ability to file a lien for materials never actually delivered to the job sight - that is less clear (and probably less optimistic). At their core, mechanics lien rights provide security for those who improve property and go unpaid for their work. While specially fabricated materials will eventually improve property, until they're incorporated into the work, it's hard to argue that the property has been improved. A claimant might attempt to argue that their work falls under § 8400 of the California Civil Code, which dictates who exactly can file a lien ("A person that provides work authorized for a work of improvement ...has a lien right under this chapter..."), but where the property is not actually improved, other attempts at recovery might be more appropriate and more fruitful. This includes, potentially, a Notice of Intent to Lien. Even in situations where a mechanics lien might not be the most appropriate remedy, a Notice of Intent to Lien can help compel payment - especially when sent to all parties higher in the payment chain. By sending a Notice of Intent to Lien to the property owner, the general contractor, and/or the nonpaying customer, a claimant can help put pressure on the party who hasn't paid them. Because a mechanics lien is such a drastic remedy, the threat of lien cannot be taken lightly, and often, the other side will be more willing to deal. Lastly, it's worth mentioning that every state treats specially fabricated materials differently when it comes to lien rights, and this article helps to provide a backdrop on how a number of states treat the issue: Specially Fabricated Materials and Mechanics Lien Rights – An Overview.

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Mar 31, 2023

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