Mechanic's Liens & Preliminary Notices – Tips & Tricks

Have you ever been around a construction site? If you have, then you must have heard people mention the term “notice” in several occasions for different reasons. The word “notice” is of 2 basic types in terms of construction notices. These are mechanic's liens and preliminary notices. It is very simple for a layman to get confused between the 2 types due to their similar sounding names.

When you talk about the Preliminary Notice, which is also known as Notice to Owner or Notice of Furnishing, it basically refers to a document that lets the recipient know who you actually are the type of materials or work you are performing in reality. On the other hand, a Notice of Intent, which is also known as Notice of Intent to Lien, is basically a type of warning document that lets the recipient know about your intent on filing a lien against a specific property if you are not paid for your share of the work that you have already done.

Preliminary Notice

It is required by almost every state to send a preliminary notice. When it is needed, sending out a preliminary notice happens to be the first step when it comes to securing a lien rights on any construction project. If a required preliminary notice is not sent out or happens to be missing the set deadline, it normally invalidates all possible lien rights and also eliminates the possibility of filing a mechanic’s lien when there is no payment made.

It is important for you to know that sending out a preliminary notice can prove to be beneficial for you even if there is no need to do so. This notice will help the property owner and all top-of-the-chain parties to be in the loop pertaining to the fact about the work you are performing. In a way, it also helps to prioritize your invoice. A preliminary notice will also help to create transparency in a construction project, which will automatically build a strong working relationship. However, there are a couple of pointers to keep in mind when it comes to this notice.

It is a tool that is recommended for any type of a construction company throughout the nation. However, some states have made it necessary in order to secure lien rights.

It has several names that basically depend upon the state it is used in.

Notice of Intent to Lien

This type of notice is almost similar to a construction company’s dunning letter or demand letter. You may say that it is the second step in the process of securing lien rights once the preliminary notice is sent and right before filing a lien claim. Notice of Intent to Lien or NOI have an additional benefit of being relevant to the various parties other than the debtor and it also carries more weightage. As a result of this, it ends up being more demanding in terms of attention and also producing a bigger rate of success.