ARE CE #6

Question 1

What is a Preliminary 20 Day Notice?

Answer 1

A document that aids subcontractors, vendors, and material suppliers protect their lien rights in the event they are not paid for services rendered or materials supplied.
Within 20 days of furnishing labor or materials, subcontractors must serve a Preliminary 20 Day Notice to Owner, by certified first class mail or in person, which allows the Owner to be made aware of the lien rights of the subcontractors, vendors,
and material suppliers.

Question 2

Who has rights to file a Mechanics Lien?

Answer 2

1. Contractors 2. Subcontractors 3. Material Supplier 4. Laborer
2. Design Professional (Architect, Engineer,
   etc. )

Question 3

Which parties are exempt from sending a Preliminary 20 Day

Notice to the Owner?

Answer 3

170 Architects and General Contractors.
They do not have to send a Preliminary 20 Day Notice as they have a direct contract
with the Owner.

Question 4

What are the consequences of not sending a Preliminary 20 Day Notice to the
Owner?

Answer 4

Failure to send the Preliminary 20 Day Notice can cause the subcontractors, vendors, or material suppliers to lose some
or all of their lien rights.

Question 5

What timeframes are important to be aware of regarding Mechanics
Liens?

Answer 5

If a Notice of Completion or Notice of Cessation (work has formally stopped) is NOT filed by the Owner, the lien filing period is 90 days from completion of construction.
If the Notice of Completion or Notice of Cessation is filed, the lien period is reduced to:
• 60 days for Prime Contractors
• 30 days for Subcontractors

Question 6

What three steps are involved in issuing a

Mechanics Lien?

Answer 6

1. Serve Notice of Mechanics Lien - must serve on the Owner by registered mail prior to recording the lien.
2. Record Mechanics Lien - at County Recorder’s office in County where project is located.
3. Enforce Mechanics Lien - file lawsuit within 90 calendar days from date of
   recording.