I'm working on a project that we did a portion of the job back in April and now we are doing another phase for a higher project cost, what would be the best step to make sure are payment is protected?
2 replies
May 23, 2020
The best course of action depends on a couple of different factors.
Is the new phase of work being done on a change order to the original contract, or a new separate contract?
If it's a new separate contract, you will need to follow the normal procedure of the 20-day notice to the owner, GC, and lender, from the date that you first supplied either materials or labor for the project. Same old same old.
If the new phase of work is handled via a change order to the contract for the April work, I would suggest the following steps.
Review your original contract, and verify that this $ amount of extra work can be handled this way. Some contracts include a predetermined maximum $ amount for a single change order. Make sure that you meet any original contract specifics regarding change orders, to avoid any potential issues later.
Your original prelim, for the work done in April should still valid, providing that the owner, lender, and GC information hasn't changed.
If the lender has changed from phase I to phase II, I would suggest that you insist on a new separate contract. And then follow the standard prelim process, same old, same old.
If the lender has changed, they have no record of your original 20-day notice, which could potentially jeopardize your ability to file a lien against the property later.
My reply is based on the assumption that you are a subcontractor on the project.
I am not an attorney, nor am I attempting to provide legal advice. I was a C-2 contractor in California from 1993-2004, and my reply is based solely on personal experience.
Your mileage may vary.
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May 23, 2020
Curtis, Thank you! the new phase is going under the existing contract as a change order, the change order is in the amount of $245,952 where the original amount was for the design phase of $18518.00 so with that being said all the players are still the same.