Category Archives: news

Is using a notice service worth it?

The choices you make to protect your open “construction job related” accounts receivable are yours and yours alone.

Naturally you could choose to rely on standard “Risk” policies. ie: (to extend or not extend credit). This usually ends in one of two ways:

  1. Your client is “ROCK SOLID” and pays like clockwork, each and every time. If this is your experience and you sell to the same client day in and day out. Why add another layer of security?
  2. You are growing your business and constantly bringing on new clients. The laws of average dictate that sooner or later you will get burned. Not deliberately, but simply as a result of Murphy’s Law. So adding a layer of accounts receivable protection with the level of security anchored by a series of legal documents which will allow you to actually collect your open balances, makes for some solid business sense.

Now to the subject at hand: “Is using a notice service worth it?”

Naturally we would like you to conclude that this is a no brainer: Of course it is! However, it does take some serious consideration. Concerns like:

  • Would it be less expensive to do it myself?
  • Do I want to trust someone I don’t know with access to my client information?
  • Is this service just slapping some basic information on a form and mailing it?
  • What qualities and characteristics do I look for when choosing a service?

These are only the tip of the decision making process. However, this is a reasonable starting point and should help you to reach a final decision or at least narrow it down. Here are some answers to this due diligence:

#1  Would it be less expensive to do it myself?

Unless you are serious about using the notice system for all orders and are willing to commit the time needed to do it right. Don’t attempt this in house. Researching and preparing these documents takes knowledge and dedication to completing the research that results in a “Bullet Proof” notice. Too many try to do this on a whim and end up with all types of errors. From listing the wrong owner to using outdated forms. We have seen it all. Once again, they never intended for it to be wrong or invalid. And in most cases those who did the preparation believed it was solid and ready to stand firm against any Court or Lawyer’s Review. Sad thing is that many who are served an invalid notice don’t recognize the errors and just treat it as just another client who will now be required to issue releases for a right to lien which they may have never actually secured. So if you do consider an “In House” process. You would be well served to make it someones primary responsibility and not just an add-on to a clerical function.

#2  Do I want to trust someone I don’t know with access to my client information?

Only if they

  1. have published “Privacy Policies”.
  2. Present no conflict of interest with other services they may provide.
  3. Have been in Notice Preparation and Service business long enough where other clients can testify as to their integrity.
  4. And they are not hiding behind a website which is elusive and makes it very difficult to physically find the service. Be careful about PO Boxes, generic non descriptive email addresses, or those who may be peddling marketing list loaded with all of your customers information. Choose someone who will never be in a position of compromise.

#3  Is this service just slapping some basic information on a form and mailing it?

A sure way to investigate this behavior is “Advertised Pricing”. If it looks like a duck, sounds like a duck, you know the rest: It’s a Duck and that is exactly what you should do. As a matter of fact don’t just duck – run in the other direction. These “Low Ballers” could care less about the quality or integrity of your notice. They are all about the fast buck and the next trick. Watch out for the “One large fee for a volume of notices – paid up front. Ask yourself- do they want my business? or my money?Anyone offering to properly prepare and serve a notice must have qualified processors, who are willing to stay with the research until all critical information has been verified and the notice is properly served. You should be able to call, email, and visit, the service you are trusting with your proprietary business information.

#4  What qualities and characteristics do I look for when choosing a service?

How long have they been in the business? How long have they been servicing the same clients? Are they Insured? Licensed? What do their clients say about their service? Are they comparable with your business structure? IE: Do you need a service who can service all of the states where you conduct business? How do they accommodate your accounts payable processes? What hoops must you jump through to submit your request? Are they available when you need them? Do they know and understand the laws which govern the notice process? This list can go on and on. The key is that you are choosing a service which is not a “Fly by Night”. A service that takes this business serious, and people who you can respect.

Need to explore a proven leader in this field?

 

Don’t shoot the Messenger

 

Looks like the California Mechanics Lien process just got a little more expensive.

Governor Brown has signed into law an amendment to the California Government Code:

Title 3, Division 2, Part 3, Chapter 6, Article 5 “Fees”

Effective January 1, 2018 the recordation of a Mechanics Lien, Notice of Completion and possible a Release of Mechanics Lien will now be subject to an additional $75.00 recording fee, Ouch! Now this new fee reaches far beyond the recording of a mechanics lien. It applies to almost any document which applies to real estate and must be recorded. So many many transactions of California Real Estate will be handicapped by this new charge.

Naturally, just like the new California state tax increase on gasoline, the public is being encouraged to contact their representative and launch a complaint as to what may have the appearance of unfair price gouging. After years of being subject to reasonable rates like $8.00 per page or something close to this rate, the new $75.00 surcharge surely takes on the aura of this kind of behavior. However, until this is changed, or overturned by the courts. Everyone will need to pay the new fee.

So what is the best strategy? How should you prepare to work with these unavoidable increases?

For Starters: Make sure that you are prepared to RECOVER these fees within the scope of your business contract. Have your attorney review your sales order, proposal, quotes, etc. and make sure the language is included that will allow you to recover all of your cost to pursue a mechanics lien without risking these cost.

Also, avoid choosing the California Mechanics Lien process for amounts that are minimal. If you need to expose yourself to a higher lien filing cost, be ready to follow it through and that your claim is bullet proof.

Make sure that your negotiations take all of these cost into consideration. If you hold a mechanics lien on a property and have negotiated a price in exchange for a release of lien, it would be wise to add the cost of having a Release of Lien prepared, including the new cost to record the release.

The mechanics Lien will continue to be the best tool for securing your unpaid receivables on any construction project. However, reviewing your collections processes and taking action to ensure your mechanics lien is supported by well researched preliminary notices, and guarded by an alert system that keeps you away from stressful, 11th hour decisions, will keep you in the drivers seat.

For additional information on these new California Government Code changes contact CRM

1-800-773-5467

Stop Date – a moving target

When do your Lien Rights begin to wind down?

Most states, not all, have statutory conditions which offer a subcontractor or materials supplier 90 days from last supplying or last performing work on the project, to record and serve a mechanics lien. This should be easy to track. However, for many it is not. Why? Because stuff happens. You know what I am talking about: High order days, Exchanges, New Accounts, Sick Days, the whole enchilada. It’s called business. Thank God we have it. But at times it can be overwhelming.

You may ship materials to a project on day 1 and be finished. Naturally this means that you have 90 days from day 1 to record and serve your mechanics lien. But what happens when on day 32 the same customer orders another shipment for the same job? The simple math is:  you now have 122 days from day 1 to record and serve your mechanics lien. And should the same customer place another order on day 67 . . . I think you get the picture.

Your Stop Date or Last Furnishing Date is always subject to being a “Moving Target”

As long as that target continues to advance, you have a longer time to concern yourself about filing a lien. Bottom line is that you will always have 90 days from the date you last supplied or performed work. (Of course we are referring to states were the statute allows 90 days) So the challenge with the Moving Target is: How do you track it?

One of the best answers we can provide is:

 

 

 

Using eAlerts Unlimited and the eAlerts Reporting Process, you will have one of the most efficient tools for keeping track of this moving target. It does require a little work on your behalf. (Upon receiving your eAlert Report, you will need to check your clients job accounting file and note any new shipments, or workorders.) However, the report will guide you through every open Preliminary Notice, sorted by job site and your customer, and allows you to simply jot down the most current ship/work order dates on the report, then email the eAlert Report along with your updated status, back to CRM.

Once your review with updates of the eAlert Report is received, your moving targets will be indexed and your ongoing reports will be one of the most useful accounts receivables management tools in your credit and collections toolbox.

For more on eAlert Unlimited, select the image above.

Completion? Last Furnished? Stop Date?

Many ways to reference what most consider to be the same thing. However, everyone of these terms have completely different meanings and various concerns on those planning to secure their outstanding receivables on any given job.

Lets take some time to give each of these the respect they deserve and hopefully avoid compromising your lien rights due to misunderstanding.

First and foremost is the COMPLETION date. This is usually manifested by a formal filing of a “Notice of Completion” with the recorders office in the county where the property is located. But it may also be confirmed by the owner and the general contractor agreeing that the contract is completed, final payment is made, and no further work is required. In other words the COMPLETION is driven by the finalization of the original construction contract between the owner or owner’s agent and the general contractor.

So why is this important?

Why is it any different than the date you last furnished to the project or the date your company stopped working on the job?

One thing to consider is the lien law statute for the state where the property is located. If the statute declares that the time for anyone holding a right to bring a mechanics lien against the job will expire 90 days after the Notice of Completion is recorded. Then on the 91st day after recordation, your lien rights are gone.

Now there are states which declare that a subcontractor or materials supplier is allowed up to 90 days after last furnishing to record and serve a mechanics lien.

How does this differ from the above?

When you consider any project which may last many months or perhaps years. Many different trades could participate in the project long before the original construction contract between the owner and the general contractor is completed. However, if the state statute requires them to record and serve their mechanics lien, not later than 90 days after their STOP DATE or after they last supplied to the project. Then their mechanics lien rights will also disappear 91 days after they finish.

So how do you protect your open accounts receivables when there are so many variables which could impact your time to take action?

At CRM we offer a clients a service called “eAlerts Unlimited” This Lien Rights Tracking Program is driven by the STOP DATE, or anticipated STOP DATE, which is recorded on the date your request for a notice to establish your lien rights is received. Most clients do not know when they will stop supplying to the job. For some it may be a one time shipment, while others may continue to supply for months or perhaps for the duration of the project. One key point to keep in mind is: “It is not solely based on the shipments you may supply to the job site” It is also governed by each of your customers who may have ordered from you for the same project. Each customer will need to be named in separate initial notices that will protect your lien rights on this project.

The sweet feature of the CRM Unlimited eAlerts program is that it E X T E N D S your time to take action by the continuation of your “Last Shipped Orders”. The CRM eAlert Reports (Weekly, Monthly, or As Requested) will allow you the opportunity to compare the

“STOP DATE” on the report with your last SHIP DATE in your accounts receivables file.

When they are the same, you will need to consider the recommended action as listed in the report. When these dates differ, you may note your last ship date on the report and return, via email, to CRM. We will then extend your original STOP DATE to the new LAST SHIP date and your time to consider a mechanics lien will be extended accordingly.

For additional information please select:

Never miss another Mechanics Lien DEADLINE

Making sense of Texas Retainage Notices

So the law reads that your “Notice of Retainage Agreement” must be served not later than the earlier of:

The 30th day after the claimant’s agreement providing for retainage is completed, abandoned or terminated. or the 30th day after the date the original contract is terminated or abandoned.

So what is being implied:

  1. The owner of the property will comply with the law and retain 10% of the monies as proposed in the General Contractor’s Contract.
  2. If you are the original contractor and possible a first or second tier subcontractor or materials supplier, you are automatically subject to this retainage condition.
    1. To further protect your earnings, it may be wise to have your client sign a contract which includes a retainage agreement which stipulates the exact amount you are agreeing to have withheld until retainage is due and payable.
  3. To be in compliance with the time allowed for you to serve a “Notice of Contractual Retainage” you must be aware of when you finish on the job and also when the general contractor finishes on the job. If you finish before the general, then you have 30 days from the date you finish to serve your notice. However, should the general contractor complete the project before you. (This may be theoretically impossible. But there could be a situation where your work may include some punch list items being addressed after the general has already signed off on the job.)

In either case the best strategy is to serve your “Notice of Contractual Retainage” as soon as you start. In Texas, the amount to be retained is 10% and you should be able to determine this amount on the day you start. So why wait, and run the risk of missing the opportunity to protect your Retainage? This could be your whole profit or a large part of it. To have it victimized by missing a due date is ridiculous. Keep in mind, the timelines listed above are deadlines. There is nothing to prevent you from serving earlier.

Keep in mind! The unpaid balance due you for the 90% of the work is separate from the 10% withheld retainage amount. You may NOT include retainage in a mechanics lien for the unpaid balances earned through the base contract, unless you are able to file a mechanics lien after all terms have been satisfied and all or part of your contract remains unpaid. However, should the terms for the retainage be unsatisfied at the time to bring your mechanics lien forward, you will need to file a mechanics lien for the unpaid contract and upon satisfaction of the terms for the retainage agreement, perhaps a second mechanics lien for the unpaid retainage

Don’t let your Retainage be compromised. You will need to serve this notice to protect your Retainage. So better to act sooner than later.

Order Notice

 

I filed my lien . . . now what?

This is a very common question once a mechanics lien has been filed and served. The most important thing to consider is that your recorded mechanics lien: “Is not an end in itself”.

Most states offer two distinct options for a recorded mechanics lien. Some offer a third option which will be covered later. The first thing to be aware of is the “Life Cycle” for your mechanics lien. In many states the mechanics lien will become invalid 90 days after it has been recorded. Meaning that all of the time and expense you incurred to protect your lien rights and file your lien, will go down the drain on the 91st day. Why?  . . . because you must take action to advance your mechanics lien.

The most common action is to release your mechanics lien. This is the least expensive and is required if within the 90 day life cycle of your mechanics lien, the property owner has paid you for the full amount, or an amount which you have agreed to settle your claim of mechanics lien. Of course this action, releasing the lien, is only a viable action if you are paid. Should you not be paid, you must present your mechanics lien to a licensed attorney and have them begin a “Foreclosure Lawsuit” before your mechanics lien expires. This can be expensive. However, you may be able to capture your expenses should you win your case in court and request the judge allow recovery of your expenses in addition to the amount claimed in the mechanics lien.

Remember Option #1 Release of Lien (inexpensive), Option #2 Foreclosure Lawsuit (expensive)

Now there are some states, California for example, which offer a third option.

Option #3 Extend your mechanics lien.

This option buys you time (as much as 270 additional days) before you must start foreclosure. But the Lien Extension will cost you the price of a new mechanics lien. While the lien extension is designed to lengthen the time allowed to settle the claim, it must be agreed to and signed by both the claimant and the owner. Set terms for payment of the claim must be declared in the lien extension. And the claimant may advance the mechanics lien to foreclosure anytime during the extension if the terms of repayment are breached.

Not all states have this option but for those that do, it presents a very affordable and secured method to collect on your mechanics lien claim while holding the property in a collateral position.

Now with all of that said, be aware of the 91st day! Your mechanics lien, if left without action for 90 days, will become invalid and a cloud against the title of the property will be created. Your mechanics lien must be removed, with prejudice, when requested by the owner. It makes no difference if you have been paid or not. You are only allowed a limited period to take action with your mechanics lien. Should you let this time slip by. You will be literally up the creek without a paddle.

Have questions? Call us. We can help.

If my customer serves a prelim will I be covered?

My customer, who is a local distributor of roofing materials, served a prelim on a job and I will be supplying the roofing materials to the job and invoicing my customer. Am I protected under his prelim?

Short answer is ABSOLUTELY NOT and there are many possible reasons why you are not protected.

To start, the property owner has the ultimate responsibility to become liable to all who participated in the project who have a Right to Lien as evidenced in the most current state statute. When the statute demands that all who may be able to claim a lien must first notify the owner with a properly prepared notice. Then this means you, not your customer.

It is also possible, as in this example,  that you may be providing materials to another supplier who in turn is supplying to the job. This would be viewed as a Transfer of Inventory even if you shipped the materials directly to the job.

Many other conditions could impact your ability to have a Right to Claim a lien on a project. It is always best to request a prelim from CRM on or before the day you ship materials or start to work on a project. Let CRM conduct the research and make certain that you have a properly prepared and served notice to secure your Right to Lien.

There are many examples of conditions, which could exist, which may impact your Right to Lien. From a suspended or delinquent Contractors License to a misrepresentation of your business entity by failing to properly state your legal business identity on your contract or your clients order for services.

Keep in mind. This whole process of serving notices is driven by strict compliance with the laws that govern improvements to real property. Something as simple as forgetting to use “Inc.” after your company name when your are in fact an incorporated business, may invalidate your notice. Don’t take chances. When you have an experienced company like CRM prepare your notices, you may expect them to “peel back the onion skin” and look for all of the details, which those who may want to invalidate your Right to Lien, are hoping you overlook.

Here is the bottom line! When you have true lien rights to protect, you do not want to make a simple mistake that could cost you your lien claim after you have spent a ton of money to enforce your claim. Silly things like

  • Claiming a lien right or a lien under a business name of which you have no right to lien. (That is why CRM request that you enter into a “Service Agreement” with CRM.  This allows CRM to confirm that the notices we serve for you will actually protect you because you proper business identity is listed in the notice)
  • Or trying to claim a mechanics lien for the sale of some services or materials that could not be substantiated as having improved Real Property. ( Example: If you rented a Forklift to a job, you may protect the “RENTAL INCOME” earned on the Forklift ONLY IF the Forklift was used to help improve the Real Property. If the Forklift was used to unload tractor trailers of materials or supplies used in the business operations of the company whose property was being improved, then the rental income was earned but DID NOT help to improve the value of the real property.
  • Staying with the Forklift example: What if the Forklift is DAMAGED on the job? What if the cost to repair the Forklift is $10,000.00? Should you include the cost to repair the Forklift in your Lien? Most likely not. Why? The damage to the Forklift should be covered by Liability Insurance. (The Rental Industry usually refers to this as “Damage Waiver” Insurance.) So an insurance claim for the damages should be filed and this transaction should not be part of your claim for a mechanics lien.
  • Another scenario is when a Materials Supplier is supplying materials to someone else who has contract “to supply materials” to the project and they claim their right to lien for materials that you supplied. They are protected, you are not protected! If you try to claim a lien right it will be disqualified even if you delivered the materials to the job as a service to your Materials Supplier Client who ordered the materials from you. (Perhaps you should have sold the materials under a “Joint Check” agreement. This would help your protection if your client must go to court to collect on the materials you supplied.

There are many conditions which could surface in any business transaction. To be safe, we encourage you to use a service who ask the right questions and understands what it will take to make sure your notices do the job you expect them to do. To learn more about preliminary notices and other methods for securing your job related accounts receivables.

ContactUS

Understanding Retainage

While the concept is no mystery to those who participate in the construction industry. The means by which you protect these job related accounts receivables can be a little tricky.

Lets take a look at Texas.

Texas statutes actually require that the property owner hold 10% retainage from the total due the Original Contractor until the project has completed, and 30 days have elapsed. Why? Why does the State make this requirement upon the Property Owner? There may be several answers to this question. But the one that jumps out is: “To help defend against mechanics liens which those, other then the original contractor, are preparing to bring against the project due to unpaid contracts”.

By requiring the Property Owner to hold back (RETAIN) 10% of the amount due the Original Contractor for up to 30 days after the job is completed. Those with unpaid contracts can properly notice the property owner while funds are still available to satisfy these claims and protect the property owner from possibly paying twice for the materials, supplies or labor which was provided to the project under subcontracts.

Now the key to protecting all of your unpaid balances for this project is to have a crystal clear understanding as to what is retainage and what is not!

Best way to explain is by illustration:

Lets say that you are the Plumbing Contractor for an improvement being made to Texas Corporate Park. You have subcontracted with the Original Contractor to install all of the plumbing fixtures for a total price of $650,000.00. You agree to a Retainage Agreement of 10%.

So from the very beginning of the project you know that $65,000.00 of the total due to you are not collectable until the TERMS of the RETAINAGE AGREEMENT has been satisfied. Lets also say that your work of this job will last 5 months and that you actually finish on time. To sweeten this illustration, you have 100% approval of your work by the Original Contractor and the Owner. I know, sounds like utopia. Bear with me for this illustration. Your contract of $650,000.00 should be paid in full. However, you agreed to allow 10% ($65,000.00) be subject to the retainage agreement. Your subcontract also most likely included terms for you to submit invoices as you completed select portions of your contract. Those invoices cannot total more than $585,000.00 and are due and payable to you during the course of the contract in accordance with your agreed terms.

To protect the $585,000.00 (amount of subcontract less retainage) you must submit all first and second notices of unpaid balances as they become due during the 5 month project, in order to secure your right to file a mechanics lien for unpaid balances. If you were 100% in compliance with the Texas notice of unpaid balances requirements, and unpaid balances which represent $75,000.00 of the $585,000.00 are owed to you.   An affidavit of lien for $75,000.00 may be claimed. If your affidavit of lien is being claimed at a time which is also in agreement with the terms for retainage, and the retainage of $65,000.00 is also unpaid,  you may file a single affidavit of lien for $140,000.00.

However, should the terms of the retainage agreement allow additional time for disbursement of the $65,000.00 you allowed to be withheld as retainage, you must limit your affidavit of lien to the $75,000.00 unpaid balances portion and consider an additional affivdait of lien for the retainage portion once the retainage agreement has matured and you have not been paid the $65,000.00 Retainage.

So the lessons to consider from this illustration are:

  1. Avoid mixing unpaid balances with retainage (Unless all amounts are due or past due)
  2. Make sure that you have complied with ALL Texas notices for retainage and unpaid balances. (Most will get the unpaid balance portion under control. It is the retainage protection which tends to get lost in the paperwork)
  3. Using a professional lien service, with years of experience with Texas notices, should greatly reduce the worry and keep all of your unpaid job related accounts receivable in compliance with the requirements that allow you to seek protection under the statutes.

Contact CRM for all of your notices in all 50 states.

Pennsylvania Notice Registry – UP and Running!

As of December 2016, the Pennsylvania Legislature has opted to join the State of Utah using online management for the protection afforded to Property Owners, Contractors, and Materials Suppliers under the latest PA Lien Law Statute. The two Critical Components of these changes are:

  • Projects must be valued at $1,500,000. or more.
  • A Notice of Commencement must be filed online.

So does this mean that projects less than $1,500,000 are not protected? And what happens if those responsible for filing the Notice of Commencement fail to do so?

Better check with your attorney to seek answers to these as well as more questions which are bound to surface. This is something brand new for Pennsylvania and there is always a possibility that a few kinks may need to be worked out.

It is possible for one to conclude that Contractors and Materials Suppliers are at the mercy of the Property Owner or General Contractor to initiate the process by recording a “Notice of Commencement”. Until this is filed, the required notices from the subcontractors and materials suppliers cannot be added to the Pennsylvania Construction Notice Registry.

While there is currently no requirement within the statute that requires a physical serving of any of these protective notices, it may be prudent to take the online process to the tried and tested physical delivery of a hard copy by certified mail.  Subcontractors and Materials Suppliers are subject to the required “Notice of Furnishings” with a 45 day window of serving, as well as any “Notice of Non Payment”, be filed in the registry in order to protect their rights to file a mechanics lien. Serving hard copies of these combined with the online filing (when available) may prove to be the ultimate strategy for protecting your mechanics lien claim, should one become necessary.

The Common Sense Logic looks something like this. Should something happen which prevents the Subcontractor or Materials Supplier from accessing the online registry, or an error is discovered in the original notice of commencement, or  . . . you know the liturgy of things that could go wrong. Then would it make sense to be able to offer hard copies of these notices, along with proof of service, to your attorney so that your claim can be advanced? Or would you just rely on the fact that you were unable to file online and therefore you want your lien rights acknowledged?

While this strategy is no guarantee and may not be honored, it is surely better than doing nothing and claiming that you were unable to file online because of some technicality. So as in most backup plans, the first choice is to complete the online filing requirements within the allowed 45 day limitation. In addition, serving a hard copy of the online notice can surely do you no harm and may prove to be the evidence needed.

Of course this is not legal advice, just common sense. Always check with your attorney before opting to select any alternate methods. But do ask yourself this question: “Why is this a bad idea?” especially if the hard copy references the date and time of your online filing.

Better safe than sorry.

Are you protected by the Lien Laws? – part three

 

 

 

So we have covered: Real Property, Work of Improvement, and Eligibility in the first two parts of this series. These are all critical to understanding mechanics liens in almost every state. Now we will dive into the next critical area.

Time

 

Every state has specific requirements with regards to the time allowed to seek protection under the mechanics lien law. One hard fact to embrace from the start is: Forget the concept of holidays, weekends, snow days, closed due to construction, all of these normal and natural periods are completely ignored when it comes to complying with the lien laws.

So, if the lien law allows 20 days from the day you begin to work on the project and you start to work on December 23, 2016 You have until January 11, 2017 to have your notice served. 20 calendar days. Of course you could always have your notice served on day one (December 23, 2016 in this example) but you cannot wait until January 12, 2017 and receive total protection. Now this example is based on California Lien Law and it applies to those who must, by law, serve a preliminary notice in order to secure their rights to claim a mechanics lien. Other states have different time requirements; Florida allows 45 days, Oregon 8 days, some allow -0- ( you must serve notice before you start). Best tool for keeping up with these timelines is the CRM 50 State Guide.

 

 

 

This guide is complementary and can assist you with determining the action required to secure and protect your rights to claim a lien. When you need to seek protection under the lien laws you must respect the scope of the timelines.

Using the above example; 20 days to serve your preliminary notice, then what? If you have been paid, you will need to Release your Right to Claim a Mechanics Lien. If you have not been paid, you MAY serve and record a mechanics lien. This will protect the Lien Rights granted to you by the serving of a preliminary notice. Most states allow 90 days from the day you stopped working on the project. However, our California example allows 90 days from the completion of the project or 30 days from the filing of a “Notice of Completion” providing you are served an advisement which informs you of the Notice of Completion being filed. In either case 30 days, 90 days from completion, or 90 days from last working on the job. These days are HARD Calendar Days. Forget any weekends or other “reasons to delay”. The courts do not care why you filed late. You and everyone else who are eligible and secured their right to claim a lien, are subject to the same timeframe.

Here’s a small tip: Allow at least 50% of the timeframe listed within the state statute to begin your claim of lien process. Example: if the statute allows you 90 days from the completion of the project, then by day 46 begin the process of claiming your lien. Reason; some of the process is left to Public Agencies to facilitate your claim. This could be something as simple as submitting your lien for recordation in the County Recorders Office or having your lien served by a Sheriff. These processes are subject to unforeseen delays. Any of which may cause your lien to be delayed to a point where it is no longer eligible for serving as a valid claim.

Once again, the scope of this article has not included all that should be understood so keep an eye out for: Are you protected by the Lien Laws? – part four “How much can I claim?”