Insurance & LiensQuestion 1513 of 1605
Best practice is to serve the Preliminary Notice at the START of a project even if payment is currently on time, because:
a.It automatically extends the lien deadline to one year
b.Late service limits lien and stop-notice rights to work furnished within 20 days before the notice; early service preserves the full claim
c.It is legally required to be served before signing any contract
d.It waives the need to record a lien later
Explanation
Because Civil Code §8204 limits recoverable amounts when notice is late, serving the preliminary notice within 20 days of first furnishing preserves lien and stop payment notice rights for the entire claim. Waiting risks losing rights for early work if a dispute later arises.
Law Reference: Civ. Code §8200Practice all 1605 questions free — no signup required.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)