CSLB Law & Business ExamInsurance and LiensMedium
A drywall subcontractor has a contract only with the general contractor (not the owner) on a private project with a construction lender. To fully preserve lien, stop payment notice, and bond rights, the subcontractor's preliminary 20-day notice must be served on which parties?
- AOnly the general contractor
- BThe property owner, the general contractor, and the construction lender
- COnly the construction lender, since it controls the funds
- DOnly the property owner
Show answer & explanationAnswer & explanation
Correct answer: B. The property owner, the general contractor, and the construction lender
A subcontractor or supplier who lacks a direct contract with the owner must serve the preliminary notice on the owner, the direct (original) contractor, and any construction lender to preserve mechanics lien, stop payment notice, and bond claim rights. Missing any required party can limit the claimant's remedies against that specific party.
Why the other options are wrong
- A. Serving only the general contractor fails to preserve lien rights against the owner's property.
- C. The lender alone is insufficient; owner and general contractor must also receive notice.
- D. Serving only the owner fails to protect stop notice rights against the lender or claims against the general contractor's bond.
Preliminary Notice Recipients
A subcontractor without a direct contract with the owner must serve preliminary notice on the owner, the direct contractor, and the construction lender to preserve all available remedies.
- Direct contractors do not need to notify themselves
- Missing a required recipient can limit remedies against that party
- Notice must be served within 20 days of first furnishing work or materials
Memory trick: Owner, contractor, lender — notify all three to stay a lien-sender.