Monthly Archives: January 2014

Notice of Non Responsibility Service Options

The Notice of Non Responsibility is a multi step process which includes:

  1. Research and Prepare
  2. Review, Approval, and Return of the prepared Notice by the Client
  3. Deliver to the appropriate Recorder’s Office for Recordation
  4. Recordation with Conforming Copies
  5. Delivery the executed Notice of Non Responsibility to the property
  6. Posting the Notice of Non Responsibility in an compliant location
  7. Recording “Proof of the Posted Notice of Non Responsibility”

We refer to the above as a TurnKey process when you elect to have CRM complete all 7 steps. However, as this can be a very costly endeavor, CRM offers our clients to pick and choose which of the above steps they may want to complete on their own, allowing CRM to facilitate the remaining processes.

So how much will the Notice of Non Responsibility Service cost? Lets examine each of the steps to get an idea of how the Notice of Non Responsibility is created and made compliant with the Statute:

First and foremost is the fee to research and prepare a Notice of Non Responsibility.

CRM charges a flat rate fee of $90.00 for this service. This fee is not subject to any discounts as the individual cost to do the work for 1 notice or 100 notices does not change. Every time a Notice of Non Responsibility is ordered the process is the same. There are no shortcuts and no economy of scale.

The Notice of Non Responsibility must be recorded in the Recorder’s Office for the County where the property is located. So the next service to consider is how you want to have the Notice of Non Responsibility sent to the County Recorder’s Office for recordation. This can be accomplished by Certified Mail, FedEx, or Courier. So here the choice becomes anywhere from $5.00 to $240.00 per notice (or batch of Notices) depending on the location of the Recorder’s Office and the available options to submit your notice for recording. Allowing ample time for recording in remote areas is suggested.

In addition to your preference as to “How to send it to the Recorder’s Office” you must also include the fee for Recording the Document. Every Recorder charges a different fee for this service. We have seen some as low as $8.00 per page while others can range in the $30.00 plus area. Neither CRM nor anyone else has control over these costs. They are dictated by the Recorder’s Office and everyone is charged the same fee.

Your final decision in the Notice of Non Responsibility process is how you want to have the notice posted on the building. This is a critical part of the service and cannot be left undone. However, here is an area where you could save some money by considering several strategies. The most economical is for you to have one of your On Site agents post your own notices. While this would surely eliminate receiving a posting charge from CRM, it is not always the preference of our clients. Often the On-Site agent is not that close to the building and the posting activity can really take away from his or her daily responsibilities. The other issue we usually see is that your agent may not be familiar with the laws that govern the posting requirement and could cause misunderstanding between the Tenant and the person doing the posting. However, if you truly want to minimize this cost, posting your own is definitely an option to consider.

If you prefer to have CRM handle the posting for you, it is possible to save by consolidating posting activities. When you have multiple notices to post at the same property CRM can batch those notices which are still within the legal timeframe for serving and have them all posted during a single trip to the property. As the posting service represents the largest cost in the Notice of Non Responsibility process, we want our clients to consider all of their options. CRM will take care of this service for you. However, because of the scheduling, travel, and cost of having an experienced and knowledgeable agent perform this service, it becomes a very expensive part of the process and should be considered with a complete understanding and awareness of the cost involved to facilitate a successful posting.

So to help simplify the Posting Cost Estimating Process, CRM charges $80.00 per hour for posting a single Notice of Non Responsibility. This usually averages about $160.00 or 2 hours for each notice that we post. This fee includes the labor and the transportation to and from our Brea offices to the property where the notice must be posted. It also includes taking digital photos of the posted notices, which serve as proof that the posting was in fact completed. One thing you may count on is that CRM has carefully selected the couriers we use. Their fees are fair based on the quality of service they perform as well as their understanding of the nature of the work and their dependability. Not all couriers are the same. We found that we can only use those who are truly professional in their business model and the people they employee. It is possible to save money with a lower cost courier. However, when you consider the serious nature of the Notice of Non Responsibility, we found that it does not pay to compromise this activity for the sake of a few dollars.

Contact us for a free proposal to complete any of your construction notice needs.

Are you protected by the California Lien Law?

If you own a construction business in California, it’s important for you to know and understand the key elements of the California Mechanics Lien Law. The provisions in the California Lien Law are designed to protect your Lien Rights; however, you have to make sure that you follow the law exactly as it is laid out in the California Civil Code § 8000 et seq. One small mistake can invalidate your entire Mechanics Lien claim.

If you need to file a Mechanics Lien in California, you must comply with the statutes laid out in the California Lien Law. Navigating the California Mechanics Lien Law on your own can be difficult, so we’ve highlighted a few key provisions to help you better understand the laws and requirements for your California-based business.

In California, a Preliminary Notice is a Requirement
The first thing to note is that a Preliminary Notice is required in the state of California. According to the California Lien Law, if you do not deliver a Preliminary Notice “at the start of furnishing labor or materials”, you risk losing your Mechanics Lien rights. The law requires everyone who is not in direct contract with the property owner to deliver a Preliminary Notice within 20 days of first furnishing labor and materials to the project. General contractors (that is, those who are in a contract with the property owner) must file a Preliminary Notice only if the project has a construction lender. It’s also important to note that the Preliminary Notice must contain all of the information required by California Lien Law, and it must be sent to the property owner, general contractor, and construction lender (if applicable).

As a General Rule, You Have 90 Days to File a Mechanics Lien in California
When it comes to filing a Mechanics Lien claim, you need to know the deadline for filing your Mechanics Lien. In the state of California, you have 90 days from the actual completion of the project to file a Mechanics Lien. However, if the property owner or contractor files a Notice of Completion formally announcing the project’s completion date, the deadline may be reduced to 30 days from when the notice was filed.

California Limits the Amount You Can Claim in a Mechanics Lien
California’s Lien Law is one of the strictest in the country when it comes to the amount you can and cannot include in a Mechanics Lien claim. According to the California Lien Law, the value of a Mechanics Lien claim is limited to the lesser of (1) the reasonable value of the work provided by the claimant or (2) the price agreed upon by both parties (as laid out in the contract). This leaves no room for additional fees, such as late payment penalties, attorney fees, interest, or lien costs.

These are just three key provisions included in the California Mechanics Lien Law. There are hundreds more that are just as important to the success of your Mechanics Lien. Don’t risk your Mechanics Lien Rights by trying to navigate the laws on your own – hire a Preliminary Notice and Mechanics Lien Service to prepare and serve your California Preliminary Notices and Mechanics Liens. While there are many reasons to use a professional Preliminary Notice and Mechanics Lien Service, the best reason is the research that the service provides.

Quite often the information gathered by your sales force or customer service team may list a business owner and not the property owner. The job address referenced on your clients work order may be completely different than the address actually being improved. Any misinformation entered into the initial prelim may end up on your lien document and render your entire effort as being invalid.

CRM Lien Services will thoroughly research and verify all of the information included in your Preliminary Notice and Mechanics Lien so your Lien Rights are fully protected. We stay current with the changes to the California Lien Law so your notices are prepared according to the latest statutes.

If you’d like to request a proposal for our services, click here.

Keeping Current with the Washington Lien Law

Mechanics Liens are the most effective way to claim any unpaid debts owed to your construction business; however, the actual filing of a Mechanics Lien claim can be a complex process that requires a lot of attention to detail. One small mistake can invalidate your entire claim and lead to a huge financial loss for your business.

The Washington Lien Law is complicated, with changes and updates being made to the law every day. Before you file a Mechanics lien in Washington, you need to have a basic understanding of the current Washington Mechanics Lien Law and the steps you need to take to properly file a Mechanics Lien. We have highlighted the most important facts for Washington-based businesses to know regarding the law and their Lien rights.

Keep the following in mind if your construction business is getting ready to file a Mechanics Lien:

  1. In order to file a Mechanics Lien in Washington, you need to prove that your construction project is a qualifying improvement, as outlined in Washington’s Lien Law. According to the law, the term improvement means “(a) constructing, altering, repairing, remodeling, demolishing, clearing, grading, or filling in, of, to, or upon any real property or street or road in front of or adjoining the same; (b) planting of trees, vines, shrubs, plants, hedges, or lawns, or providing other landscaping materials on any real property; and (c) providing professional services upon real property or in preparation for or in conjunction with the intended activities in (a) or (b) of this subsection.”It’s important to note that in the state of Washington, suppliers to suppliers are not protected under the law.
  2. In Washington, a Claim of Lien must be filed within 90 days of the date the participant last provided service or materials, and – once filed – the Claim of Lien must be delivered to the real property owner within 14 days via certified mail. The claimant MUST obtain a return receipt upon delivery. The Mechanics Lien will only be valid for 8 months, and if no action is taken during this time, the Lien will expire. Failure to adhere to these deadlines will invalidate your Mechanics Lien.
  3. If you are not in direct contract with the property owner, you are required to deliver a Notice to Owner (also known as Preliminary Notice) within 60 days of first furnishing labor or materials to the project. There are some protections in Washington’s Lien Law if you fail to deliver a Preliminary Notice on time; however, it requires you to have furnished labor or materials within 60 days from the time the notice is sent. If you fail to deliver a Notice to Owner, you may not have Mechanics Lien rights.
  4. If you are a general contractor in direct contract with the property owner, you may need to send a Model Disclosure Statement prior to the start of the project. If the project is for a commercial property with a bid between $1,000 and $60,000 or involves repair or alteration of a residential property of 4 or more units (with a bid of over $1,000), a Model Disclosure Statement is required. The statement must be signed by the real property owner, and the general contractor must keep it on file for at least three years.
  5. According to Washington Lien Law, all parties are required to record the Mechanics Lien within 90 days of last furnishing services, labor, or materials to the project. No excuses will be made for late filings. If you miss the 90 day deadline, your Mechanics Lien will be void.
  6. Once payment has been received, the claimant must immediately cancel the Mechanics Lien with a Mechanics Lien Release. This must be filed with the recorder to cancel the previously filed Mechanics Lien.

These are just a few key provisions included in the Washington Mechanics Lien Law. There are hundreds more that are just as important to the success of your Mechanics Lien. Don’t risk your Mechanics Lien Rights by trying to navigate the laws on your own – hire a Preliminary Notice and Mechanics Lien Service to prepare and serve your Washington Preliminary Notices and Mechanics Liens.

CRM Lien Services will thoroughly research and verify all of the information included in your Notice to Owner and Mechanics Lien so your Lien Rights are fully protected. We stay current with the changes to the Washington Lien Law so your notices are prepared according to the latest statutes.

If you’d like to request a proposal for our services, click here.

Preliminary Notices: Unique Questions And Answers That May Surprise You, Part 2

Part 2 of a 2 part series

In the previous blog we talked about what the true estimate amount you should include in your preliminary notice and what to do if you over supply what you estimated. Next we will look at serving the Lender, protection after payment has been made and undelivered certified mailings.

#3 If a Lender is added to the project after I serve my preliminary notice, do I need to serve the Lender?

Adding a Lender to a Construction Project after the preliminary notice has been served is a major hassle for those who want to protect their lien rights on the project. This is a testimony to the need for amended preliminary notices. Should you be informed, or become aware, that a construction lender has been added to the project. Contact your notice service company immediately and request that they amend the original preliminary notice to include the lender. Then be sure the lender is served. The serving of the preliminary notice has become such a severe concern that California now requires General or Direct Contractors to serve a preliminary notice on the Lender for every project in excess of $400.00. In the past the California General Contractor by virtue of their contract with the property owner was granted mechanics lien rights. However, since July of 2012, the Lender must be served by the General in order to secure the lien rights of the General Contractor.

Lets face it. If the Lender is funding the job and you are expecting to be paid through that funding, it makes sense that you want the lender completely aware of your participation in the construction project.

#4 If I sign a Final Waiver and Release, get paid, then asked to provide additional work or materials to the same project, am I still protected?

This is a slightly different spin on question #3. You finish your part of the job. You sign a Final Release. You get paid in full. So far so good. Now your customer asks you to handle a few additional items to help him finalize the job for his client. Great! More work for you, more income, how bad can it be? The answer is not bad at all, if you get paid for the additional work. However, what if the added work is equal to or in excess of your original profit on the job and you don’t get paid as agreed? You could be holding a very empty bag.

Protecting yourself is very easy. Once you sign a Final Release and you start on the add ons for the project, have a new preliminary notice served. Treat the whole process just as if you had a brand new project. By taking this very inexpensive step to protect your newfound income, you can prevent a very profitable project from going south.

#5 What happens if the owner is sent a first class certified mailing of my preliminary notice and the mailing is returned undelivered?

This is a very common occurrence although most engaged in the construction process pay it very little mind. It is not unusual for you or your preliminary notice service company to research and verify the address of the Owner or some other entity that is required to be served a preliminary notice. You send them their copy of the notice by the approved serving method and low and behold it comes back to you as undelivered. There are multiple reasons as to why this happens.

  1. The mailing address may be different than the physical address.
  2. The entity has moved since they began to work on the project.
  3. The entity just refuses to take delivery of Certified mail.

The list goes on but I am sure you get the drift. The end result is that the notice comes back to you as un-served. To be honest, you have completed your preliminary notice service obligation (for most states).  The date that you deposited the preliminary notice with the USPS is the date that service is considered to be complete. However, where is your good faith effort to make sure the entity needing to be made aware of your lien rights is informed? If the notice, upon being returned is discovered that for some reason it was sent to an older or invalid address, you or your service should step up their research. If necessary call the entity to verify their mailing address is correct. On the other hand, if you served to the correct address, we suggest that you send another copy of the notice by first class mail and keep the original served notice with your preliminary notice. This will put you in a position to support your service and your good faith effort to making sure everyone was served and your additional efforts should be looked upon favorably should your preliminary notice every need to go to court.

By the way. The above processes is what you may expect when using CRM Lien Services, Inc. to be your preliminary notice processing service. For more information or to request a proposal for your notice service needs click here.