ConstructionWhile most construction contractors and material suppliers know about serving the preliminary 20-day notice in order to qualify for a mechanic’s lien and/or stop notice, few focus on the proof of service requirement in California Civil Code section 3097.1(a).

That section provides that if the prelim is served by mail, proof of service by mail “shall be made” by a “proof of service affidavit” accompanied by either (1) the return receipt for certified or registered mail, or (2) a copy of the U.S. Post Office record of delivery and receipt. While many subcontractors and suppliers serve their own prelims, others use an independent service to do so.  Often times, we’ve found that either choice results in non-compliance with the Mechanic’s Lien Law – either the proof of service affidavit isn’t completed, the return receipt isn’t attached to it or the copy of the post office record is not attached to it.

While this may seem minor, it becomes important when trial comes around, as it sometimes does, as the mechanic’s lien/stop notice claimant cannot prove service of the prelim in strict compliance with 3097.1.

Lest you think strict compliance is not required with 3097 and 3097.1, see IGA Aluminum v. Manufacturer’s Bank (1982) 130 Cal.App.3d 699.  When the statute is clear, the court is not free to re-write it.

Point: Failure to follow 3097.1 may lead to a complete forfeiture of a mechanic’s lien or stop notice claim, irrespective of the amount.

The lesson is simple: don’t cut corners and don’t save a buck now when it could cost you thousands or millions later.  Serve the prelim properly, on time, and do the proof of service before you even have to record a mechanic’s lien or serve a stop notice.

The attorneys at Reid & Hellyer are skilled in many practice areas including bankruptcy, business, litigation, real estate and mediation.

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