Preliminary notices are referred to by many different names: notice to owner, notice to owner of right to lien, materialman’s notice, 20-day preliminary notice, prelien notice. Regardless of the name, the purpose is the same and that is to alert the property owner, general contractor and possibly the construction lender that a subcontractor or supplier is about to perform work or furnish materials. This “alert” is often the first required step that a subcontractor or supplier must take in order to maintain his right to file a lien claim.
Some states do not require preliminary notices, but most have mandated some type of notice prior to the filing of a lien claim. There is also a lack of consistency across the states as to when a preliminary notice must be mailed or received. Oregon, for example requires a preliminary notice to be mailed within 8 business days of the claimant’s first performance. Idaho doesn’t require a preliminary notice while Maryland requires the notice but not until the claimant’s work is complete.
When states require preliminary notices, they generally must be sent by certified mail, return receipt requested to the parties specified by the state statutes where the project is located. That could include the property owner, the general contractor, subcontractor, lenders, designated parties, etc. In addition, states that require notices have established a required format for preliminary notices and have determined what it must say, the font size, etc. No two states have identical preliminary notice forms and you should not assume that using one state’s form for a project in another state will be acceptable.
Generally speaking, there are three ways to handle the task of sending preliminary notices: internally by using credit staff, outsourcing to a lien service and outsourcing to a law firm. Many subcontractors and suppliers are using software to manage this task when handling it internally while others have chosen to have lien services managed the task. We would caution you that both of these avenues have risk. The software programs, for example, may or may not be updated regularly, and there are generally disclaimers that if any information on the form or deadline proves to be inaccurate, the developer has no liability. Moreover, a preliminary notice is only as good as the underlying research. If your staff is relying on customer information to pump out preliminary notices, then a percentage of notices are most likely defective.
Lien services are definitely a step up from using software onsite. However, many services have staff production targets that compromise the verification process. For example, if the service expects that staff will verify and process 30 notices per day, then the amount of time spent on each notice will be about 15 minutes, and that includes verification, data entry and proofing. Levy · von Beck & Associates has been providing the full range of lien perfection services since 1983. We take pride in measuring our success based not on the number of preliminary notices that are mailed out in a day, but in knowing that the notice is accurate and will stand up to scrutiny.
We have been helping contractors and suppliers perfect their lien rights for over thirty years on construction projects in all 50 states. Fill out our Request for Preliminary Notice to begin perfecting your lien rights today.