Insurance & LiensQuestion 1526 of 1605
On a private project financed by a construction lender, a subcontractor who fails to serve the preliminary notice on the LENDER primarily loses the ability to:
a.Reach the construction loan funds via a stop payment notice against the lender
b.Collect workers' compensation
c.Record any lien at all
d.Sue the subcontractor's own customer
Explanation
Serving the construction lender preserves the ability to use a bonded stop payment notice to reach undisbursed loan funds. Failing to notify the lender undercuts that fund-based remedy, though other remedies against the owner's property may remain if the owner was properly noticed.
Law Reference: Civ. Code §8410Practice all 1605 questions free — no signup required.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)