A contractor completes a $150,000 renovation project. The owner pays $120,000 but disputes the remaining $30,000. Under HRS 507, what preliminary notice requirement must the contractor have met to preserve lien rights?
Correct Answer
B) Notice must be given within 20 days of first providing labor or materials
HRS 507 requires contractors to provide preliminary notice within 20 days of first providing labor or materials to preserve their lien rights.
Why This Is the Correct Answer
HRS Chapter 507 (Hawaii's mechanics' lien statute) requires that a contractor or materialman provide preliminary notice within 20 days of first furnishing labor or materials to preserve the right to later file a lien. Missing this deadline extinguishes lien rights regardless of the validity of the underlying claim.
Why the Other Options Are Wrong
Option A: Notice must be given within 10 days of starting work
Ten days is not the statutory window under HRS 507. This is a fabricated timeframe; the correct period is 20 days. Confusing 10 days with 20 days is a common error on the exam.
Option C: No preliminary notice is required in Hawaii
Hawaii absolutely requires preliminary notice to preserve lien rights. Failing to serve timely preliminary notice forfeits a contractor's ability to record a mechanics' lien — one of the most powerful collection tools available.
Option D: Notice is only required for projects over $200,000
The preliminary notice requirement under HRS 507 applies to all covered projects; there is no dollar-amount threshold such as $200,000. Project size does not determine whether notice is required.
Memory Technique
Think '20/20 vision for liens': serve your notice within 20 days to keep your lien rights in clear view. If you miss those 20 days, your lien rights go blind.
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