Construction Notices 101

Spend any time around a construction project and there’s a pretty good chance that you’re going to hear the word “notice” get mentioned, often multiple times – and perhaps for different reasons –  on the same project. Even though there are just 2 main types of construction notices – the Preliminary Notice and the Notice of Intent to Lien (NOI) – it’s easy to confuse them due to their similar-sounding names.

What is a Preliminary Notice?

Sending preliminary notice is required in nearly every state. When required, sending preliminary notice is the first step to securing lien rights on a construction project. Failing to send a required preliminary notice or missing the deadline usually invalidates lien rights and eliminates the ability to file a mechanics lien in the event of nonpayment. Not sure if you need to send preliminary notice on a project? Visit Levelset’s Payment Rights Advisor and enter your project info, we’ll tell you if a notice is due in when for free. 

Even when preliminary notice is not required, it’s usually incredibly beneficial to send one. These notices keep the property owner, GC, and other top-of-chain parties in the loop regarding the work you’re performing, which prioritizes your invoice. It also helps build strong working relationships by creating transparency on the project.

Think of a preliminary notice as a precaution rather than a reaction. Preliminary notices are sent at the very beginning of a project, sometimes before project work has even commenced, and almost always well before any payment problems arise. It’s a low-cost insurance vehicle specially designed for the construction industry.

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A couple of things to remember about preliminary notices:

  • A Preliminary Notice can go by many different names, depending on the state the project is in. Here is just a partial list of the different names that some states use for preliminary notices (see table, right).

For more information, please see:

What is a Notice of Intent to Lien (NOI)?

The Notice of Intent to Lien (NOI) is best thought of as the construction industry’s equivalent of a demand letter or dunning letter. Typically, it’s the second step in the lien rights process, after sending the preliminary notice, and before filing a lien claim.

NOIs have the extra benefit of being relevant to parties other than the debtor and carry more overall weight. This results in demanding more attention and producing more success. In fact, Levelset customers have reported that sending an NOI results in payment within 20 days from delinquent customers 47% of the time. Need help sending an NOI? Click here and send an NOI in minutes.

9 states require that a Notice of Intent to Lien must be sent on private projects before a construction party is allowed to file a mechanics lien (the deadlines to send the NOIs in these 9 states vary). Click the state below to download read more about notices and requirements.

There are no NOI requirements before filing a bond claim on state, federal, or other public works construction projects.

For more information, please see:

 

 

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Construction Notices 101: Preliminary Notice vs. Notice of Intent to Lien
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Construction Notices 101: Preliminary Notice vs. Notice of Intent to Lien
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Levelset
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