What is a Preliminary 20 Day Notice?
A Preliminary 20 Day Notice is a document sent by subcontractors, suppliers, and other construction parties to the property owner and/or general contractor to inform them of their involvement on a project and to secure lien rights in Arizona and California.
Is the Preliminary 20 Day Notice Special?
The term Preliminary 20 Day Notice is used to refer to preliminary notices in California and Arizona because these states require that lien claimants send notice within 20 days of furnishing labor or materials on a construction project in order to secure the right to file a mechanics lien in the event of nonpayment. California and Arizona are not the only states that have a 20-day deadline for submitting preliminary notices (Utah does as well), but they most commonly use the term “Preliminary 20 Day Notice” or “20-Day Preliminary Notice” to refer to construction notices.
Like other preliminary notices and construction notices, the Preliminary 20 Day Notice exists to inform top-of-chain parties (like the property owner or the general contractor) who is working on a construction project. This helps facilitate a smooth payment process because it notifies top-tier parties who is expecting to be paid and how much.
Keep in mind that preliminary notices are sent proactively, long before a payment process arises. Waiting to send Preliminary 20 Day Notice until an invoice is paid late doesn’t do much good, since the notice only secures lien rights for work done in the preceding 20 days. It’s called Preliminary 20 Day Notice for a reason: it is most effective when sent within 20 days of beginning work.
Why Send Preliminary 20 Day Notice?
It is Required to Secure Lien Rights
Both California and Arizona require lien claimants to send preliminary notice in order to secure lien rights. Filing a mechanics lien is the best tool available for late-paid construction parties to secure payment, and sending Preliminary 20 Day Notice is the first step in this process.
It Speeds Up the Payment Process
Sending Preliminary 20 Day Notices prioritizes your invoice because it serves as a reminder that payment is due and motivates the recipient to make payment on time. Consequently, sending preliminary notice helps speed up the payment process and reduce DSO.
California Preliminary 20 Day Notice
California requires that preliminary notices contain particular details about the project. Typically, California requires that general contractors, subcontractors, material suppliers, equipment lessors, design professionals, laborers, and any other party who wishes to protect the right to file a mechanics lien send this notice.
To download a free California Preliminary 20 Day Notice form template, click the button below.
For more information on the California Preliminary 20 Day Notice, check out the following articles.
- Securing Lien Rights in California: A Fact Sheet
- California Preliminary Notice: The Why, Who, What, When, and How
- General Contractors Must Now Send Preliminary Notice in California
The Arizona Preliminary 20 Day Notice
Arizona requires that preliminary notices contain specific information. Generally, any party who wishes to protect the right to secure a mechanics lien in the event of nonpayment is required to send this notice in Arizona. This requirement typically applies to general contractors, subcontractors, equipment lessors, material suppliers, and design professionals. To learn more about requirements surrounding the Arizona notice, download zlien‘s Arizona Lien & Notice Fact Sheet.
To download a free Arizona Preliminary 20 Day Notice template, click the button below.
To learn more about the Arizona Preliminary 20 Day Notice, take a look at the following articles.
- Arizona 20 Day Preliminary Notice: The Why, Who, What, When, and How
- Five Things Everybody Should Know About Arizona Lien Law
- Arizona’s 20% Preliminary Notice Rule