“Can I cancel a preliminary notice?”
We get asked this question from time to time. In many cases, the party asking the question (typically a subcontractor, material supplier, or equipment rental co.) has just been paid. Usually, they’re asking at the request of the general contractor who just paid them, as in, “Hey, since we just paid you, why don’t you cancel that notice because you don’t really need it anymore.”
In short, there’s no reason to ever cancel a preliminary notice. Here’s why.
Preliminary Notices Don’t Need to be Cancelled
Anyone asking you to cancel your preliminary notice, whether they’re a general contractor or some other party on a construction project, probably doesn’t understand what a preliminary notice really does. A preliminary doesn’t exercise any rights at all. Therefore, there’s nothing to “undo.”
The notice merely acts to preserve your payment rights. That way, you can exercise your payment rights in the future should a payment issue arise on the project. If you get paid in full and on time without any issues, there’s no need to “un-preserve” your rights. The solution is simply that you will not need to exercise the rights, because the right is no longer there – it has been extinguished with payment.
Lien Waivers Don’t “Cancel” Preliminary Notices
There may be some confusion about this that arises from general contractors who require subcontractors and suppliers to execute lien waivers if they had previously submitted a preliminary notice. Some of these general contractors track which suppliers and subcontractors deliver preliminary notices, and then to track the lien waivers executed by those parties. (Levelset helps for subs & suppliers to send waivers, and for GCs to request and track them.)
That way, each preliminary notice is matched with a lien waiver, and the mechanics lien exposure is reduced. But the act of matching up executed lien waivers with preliminary notices does not “cancel” the notice at all. Rather, the two documents just offset each other.
The bottom line is that there’s no way to formally cancel a preliminary notice document – the mechanism doesn’t even exist. Therefore, not only is it not necessary to cancel a preliminary notice, it’s not even possible.
If you have any other questions, you can always talk to us. We’re here to help.