Articles > Construction law in California

The Preliminary 20 Day Notice –
2004 Change in Law Requires Use of New Form

by William L. Porter, Attorney at Law

On January 1, 2004, Senate Bill 134 became law and changed the Preliminary 20 Day Notice form which contractors, subcontractors and suppliers had become accustomed to using for many years. Despite this change in law, many in the construction industry have still not started using the correct new form. This new law, championed by the American Subcontractors’ Association, gives a significant new benefit to subcontractors and suppliers by giving the subcontractor or supplier some expectation of actually receiving notice of when a Notice of Completion or a Notice of Cessation has been recorded on many private works projects. The new law also changes the language of the California Preliminary 20 Day Notice that subcontractors and suppliers must use to protect their mechanics’ lien, bond claim and stop notice rights. If Owners do not send out the Notice of Completion as required by law, they incur diminishing protections afforded to them on many private works projects.

The revised law now requires private project owners to notify subcontractors and suppliers within 10 days after recording a Notice of Completion or Notice of Cessation that a Notice of Completion or a Notice of Cessation has actually been recorded. In order to receive such notice, the subcontractor or supplier must properly serve the new form of Preliminary 20 Day Notice. If this properly occurs and the private project owner provides the required notice, then the subcontractor or supplier will have 30 days to record a Mechanics’ Lien. However, if an owner under such circumstances fails to properly notify a subcontractor or supplier within 10 days after recording a Notice of Completion or Notice of Cessation, then the Subcontractor or supplier will have 90 days to record a Mechanics’ Lien. The details of the new law can be found in California Civil Code sections 3097 and 3259.5.

In order to benefit from the new law, the subcontractor or supplier must add the following new language, in boldface type, to the Preliminary 20 Day Notice under the section entitled “NOTICE TO PROPERTY OWNER:”

OTHER THAN RESIDENTIAL HOMEOWNERS OF DWELLINGS CONTAINING FEWER THAN FIVE UNITS, PRIVATE PROJECT OWNERS MUST NOTIFY THE ORIGINAL CONTRACTOR AND ANY LIEN CLAIMANT WHO HAS PROVIDED THE OWNER WITH A PRELIMINARY 20 DAY LIEN NOTICE IN ACCORDANCE WITH SECTION 3097 OF THE CIVIL CODE THAT A NOTICE OF COMPLETION OR NOTICE OF CESSATION HAS BEEN RECORDED WITHIN 10 DAYS OF ITS RECORDATION. NOTICE SHALL BE BY REGISTERED MAIL, CERTIFIED MAIL, OR FIRST CLASS MAIL, EVIDENCED BY A CERTIFICATE OF MAILING. FAILURE TO NOTIFY WILL EXTEND THE DEADLINES TO RECORD A LIEN.

Please note that the new law does not apply to public works projects or owner-occupied personal residences of fewer than 5 units. Moreover, the new law does not apply to those subcontractors and suppliers who fail to serve a Preliminary 20 Day Notice at all or, of course, when no Notice of Completion or Notice of Cessation has been recorded.

If you have not already done so, please be sure to update your Preliminary 20 Day Notice forms as soon as possible. Failure to do so could result in loss of legal rights important for the collection of debt for work performed and materials supplied to private works projects.

William L. Porter is a principal in Porter Law Group, Inc. in Sacramento, California.
He can be reached  at (916) 381-7868.