Why Owner Knowledge Does Not Create a Contract — and Why Preliminary Notice Still Matters

A common misconception in California construction disputes is that a subcontractor can enforce contract rights or a mechanics lien against a property owner simply because the owner knew the subcontractor was working on the project. California law squarely rejects that idea.

Under the current statutory scheme, both contractual liability and mechanics lien rights depend on clearly defined legal relationships and strict compliance with notice requirements—not informal awareness or participation.

A Preliminary Notice Is Mandatory for Subcontractors

California’s mechanics lien statutes require subcontractors who do not have a direct contract with the owner to serve a preliminary notice as a condition precedent to enforcing lien rights.

This requirement is strictly enforced. Failure to properly serve a preliminary notice generally invalidates a mechanics lien, regardless of whether the owner knew about the work, benefited from it, or communicated with the subcontractor. The notice requirement is not a technicality—it is a statutory prerequisite.

There Is No “Actual Knowledge” Exception

Subcontractors sometimes argue that an owner’s actual knowledge of their work excuses the failure to serve a preliminary notice. California law does not recognize that exception.

Even where owners receive invoices, attend meetings, or otherwise know precisely who is performing the work, the absence of a properly served preliminary notice remains fatal to lien rights. Courts do not substitute informal notice or equitable considerations for statutory compliance.

Notices of Nonresponsibility Do Not Apply to Contracting Owners

Another common misunderstanding involves notices of nonresponsibility. That mechanism applies only where an owner did not contract for or authorize the work—most commonly in tenant-improvement situations.

When an owner hires a general contractor to perform construction, a notice of nonresponsibility is unavailable and legally ineffective. The owner’s inability to file such a notice does not create contractual liability, excuse notice failures, or convert subcontractors into direct contractors.

Equitable Theories Cannot Cure Notice Defects

California law expressly rejects equitable workarounds to the preliminary notice requirement. Claims based on waiver, estoppel, unjust enrichment, or fairness cannot override the statutory scheme.

If the required preliminary notice was not served, the lien fails. That result applies regardless of the quality of the work performed, the owner’s conduct, or the equities of the situation.

Key Takeaway

Mechanics lien rights in California are powerful but strictly conditioned. Owner knowledge does not create contractual privity, does not excuse preliminary notice requirements, and does not revive defective lien claims. Subcontractors must comply with the statute as written, and owners are entitled to rely on those statutory protections.