CSLB Contractor's Law & Business Practice Exam

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In the mechanics' lien procedure, what is Step 2 when ensuring payment for works of improvement?

Request prepayment for completed work
Serve a preliminary 20-day notice
Run credit checks on involved parties
List the legal representation of the subcontractor

The correct answer is: Serve a preliminary 20-day notice

In the mechanics' lien procedure, Step 2 involves serving a preliminary 20-day notice. This notice is essential because it informs the property owner and other parties involved that the contractor or subcontractor is working on the property and that they may file a lien if they are not paid for their services. It serves to protect the rights of the contractor or subcontractor by alerting the property owner of the potential for a lien and reminds them of their obligation to pay for the improvements made. This step is critical in the lien process as it establishes the legal basis for pursuing a lien if payment is not forthcoming. By providing this notice, the contractor or subcontractor can preserve their rights to file a mechanics' lien, should it become necessary. The other options, such as requesting prepayment for completed work, running credit checks, or listing the legal representation of the subcontractor, are not standard steps in the mechanics' lien procedure and do not align with the established legal process for ensuring payment for improvements made on a property.