Hi I need to know if i need to send a preliminary notice to a customer or i can just send a mechanics lien. we are contractor and he is owner builder. we did not send a preliminary notice and work finished 6 days ago and he hasnt paid the remianing balance.
Preliminary notices are not needed for prime contractors because the Owner already knows who they are.
Assuming this is a private work of construction:
If you have a direct contract with the building owner you do not need to have served the building owner with a preliminary lien notice. However, if the building owner has a construction lender, then a preliminary lien notice was required to be served on the construction lender. If there was/is a construction lender for the project there is still time to serve a preliminary lien notice. If a preliminary notice was served on the construction lender today, you would be able to lien the project for a value less then or equal to the value of the work performed on the project within the last 20 days, i.e., the value of the work performed on the last 14 days of the project (14 days + 6 days from completion = 20). If the amount owed and unpaid is less than or equal to the value of the work you performed during the last 14 days of the project then you can lien for the full amount owed, assuming a preliminary notice was sent to the lender, if any, today.
If you had a direct contract with the owner and there was no lender you have 90 days from completion of the project to record a mechanic’s lien, and no preliminary notice was required.
If you have a direct contract with the Owner/ builder you do not need a pre lien 20 day notice, unless there is a lender financing the project, in which case, sending one to both the Owner and the Lender is required.
The Owner/builder should have told you if it was lender financed, but if not, you can usually check the County Recorder’s to see if there is a lender on title.
A lien is just a security against them selling or encumbering the property while your lawsuit for payment is resolved.
You still have to sue (within 90 days of recording the lien) and you still have to win that lawsuit, and if you do neither, it doesn’t do much for you.
You can still sue for breach of contract; you just won’t have a lien securing payment if/when you win.