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Services: Legal: 20 Day Preliminary Notice
Language for California 20 Day Preliminary Notices
SB 914 Language Change to "Notice to Property Owner" in Preliminary Notice
Memorandum from Mantalica & Treadwell
During the 1999 legislative session Senator Byron Sher sponsored a bill which added a clause to the 20 Day Preliminary Notice currently in use in California. On the right hand side of the form under "Notice to Property Owner" SB 914 requires the insertion of an additional condition after the following: "You may wish to protect yourself against this consequence by (1) requiring your contractor to furnish a signed release by the person or firm giving you this notice before making payment to your contractor or....".
"(2)requiring your contractor to furnish a receipt to establish that you paid the contractor in full and recording no later than 30 days from receipt of this preliminary notice an affidavit That you paid the contractor in full"
Although the added language requires the owner to do something to protect themselves, when the contractor sends out the preliminary notice, if the added language is absent, there is the risk that some court could find the preliminary notice defective.
Senator Sher is correcting this error by the introduction of "cleanup legislation" which will remove this requirement for new language from the Preliminary Notice form. Assemblyman Mike Honda, Democrat District 23 - San Jose, has introduced AB 576 to remove the new condition (2).
It's second reading on the floor of the Assembly is Thursday, January 20, 2000. It will be brought before the Assembly for a vote on Thursday, January 27. It is expected to pass overwhelmingly. It has a clause stating that it is emergency legislation and that once it is passed it will be retroactive to January 1, 2000.
After AB 576 passes the Assembly it will be referred back to Senator Sher for action in the Senate. There it will be read twice on the floor and then voted on, so at least three more weeks will pass before it can become a bill capable of being signed into law.
In the interim the additional language can be inserted by obtaining new BICA forms, or if your Preliminary Notices are computer generated, the additional language can be inserted into the existing language for "Notice to Property Owner".
In all events, use of the forms in their format existing prior to January 1, 2000, will probably be completely accurate before the end of February 2000. Since the legislation contains a retroactivity clause, any preliminary notices sent out in the month of January 2000 would be judged by the language as it existed before SB 914 became effective.
Addition:
The actual language of AB 576 contains statements as to the Legislative intent which make it clear that if you send out preliminary notices with the old language between January 1, 2000 and the date the remedial legislation becomes effective, the Legislature does not want you, the contractor, to be penalized. The bill states: "It is the further intention of the Legislature that a preliminary notice given on or after January 1, 2000, and prior to the operative date of this bill, shall not be invalid because of the failure to include the language added to paragraph (5) of the subdivision (C) of Section 3097 of the Civil Code by Chapter 795 of the Statutes of 1999, if the notice otherwise complies with that section."
©2008 Western Wall & Ceiling Contractors Association
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