Articles Tagged with invoice

preliminary-notice-300x300Under California law, most licensed contractors or suppliers that provide labor, services, equipment, or materials on projects involving the common area of a community association are entitled to record a mechanic’s lien or issue a stop payment notice if they are not paid for their work or materials. Associations involved in such projects often receive 20-day “preliminary notices” from vendors and wonder what they are and what, if anything, they are supposed to do with them. Contractors are required to send these preliminary notices to associations to preserve their rights to record mechanic’s liens or issue stop payment notices. The preliminary notice must contain certain information, including a description of the nature and estimated cost of the work, the identities of the parties, and the location of the property in question, as well as a boldfaced “Notice to Property Owner” statement. Contractors that are under direct contract with an association (such as a “general” contractor that hires subcontractors aka “subs” for a project) are not required to serve a preliminary notice on the association, because the association is presumably already aware of all of the information that a preliminary notice would otherwise contain. Direct contractors are instead required to serve preliminary notices on the actual or reputed construction lender for the project.

On the other hand, contractors that are not under direct contract with an association, such as subcontractors, must serve a preliminary notice on the association, the actual or reputed direct contractor for the project, and any actual or reputed construction lender. Therefore, most preliminary notices that associations receive will be from subcontractors. Generally, preliminary notices are sent via first-class registered or certified mail, express mail, or overnight delivery. As long as an association recognizes the information in the preliminary notice, generally speaking there is nothing special that it needs to do, as serving a preliminary notice on an association does not change a contractor’s rights, it merely preserves them. Sometimes, contractors request that an association acknowledge in writing that they received a preliminary notice. While signing such a preliminary notice is generally unnecessary, an association may choose to do so anyway, as a courtesy and to keep the project moving.

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