How to Send Notice to Owner?
Sending a Notice to Owner is a complicated affair. The document has a lot of criteria, such that contractors and suppliers must, within a certain period of time, make certain that they are sending the correct form with the required information to the appropriate recipients. Importantly, however, a notice to owner must be mailed in a certain way.
If a mechanics lien or bond claim is later required, the claiming party will certainly have the burden of providing they met the notice requirement in full, and the mailing method will be highly relevant to that burden. With this burden in mind, how must contractors or suppliers actually mail their notice to owner documents? This post will examine the underlying requirement, the burden of proof, the difference between certified mail and certified mail return receipt requested, and ultimately, how you can sleep at night knowing your lien rights are in-tact.
How Does The Law Require You Send A Notice To Owner?
The primary question for contractors and suppliers preparing or sending a “notice to owner” or “preliminary notice” is to figure out exactly how the law requires the notice be sent. Determining this is not as straight-forward as it may seem.
The required method of delivery may differ depending on the project’s state, the project’s type, the role the sending party is playing on the project, and the role and tier of the party who is receiving the notice. Accordingly, the answer is never as simple as “send it by certified mail.” Each time a mail piece is prepared, even when mail pieces are being prepared for the very same project, the sending party should analyze all of these factors to qualify how that exact mail piece must be labeled and sent.
Louisiana is a great example of this difficulty. Even on the same type of project (i.e. commercial projects), a notice in Louisiana may be sent by either certified mail or certified mail return receipt requested depending on whether the party is delivering materials, renting equipment, or performing labor as a subcontractor (Compare La. R.S. § 4802 with § 4822).
Another good example is provided in Washington, where preliminary notices on Washington private projects need only be sent by regular certified mail, but preliminary notices on Washington state projects must be sent by certified mail with return receipt requested.
Putting these nuances aside, mechanics lien and bond claim statutes typically require notices be sent by either certified mail, registered mail, or certified mail with return receipt requested. Less often, a statute may also require sending parties to use the “restricted delivery” service. These mail types are all quite different, and those choosing between them must understand the differences. More importantly, those sending notices must understand exactly what they would be required to prove in the event of a dispute and should tailor their mailing decision based on that.
It may seem like the easy answer is to just label a mail piece with the most “comprehensive” service. As this post will make clear, however, there is never an easy answer when it comes to lien and bond claim compliance.
The Difference Between Certified Mail and Certified Mail Return Receipt Requested
Too often, the term “certified mail” is used interchangeably with “certified mail with return receipt requested.” We have a great article on the Construction Payment Blog that explains the differences between these two mailing services in detail: Certified Mail v. Certified Mail Return Receipt. As outlined in this article:
Regular certified mail allows the sending party to track the delivery of a mail piece and find out exactly when and where the item was delivered…[and] requires the recipient’s signature [which is] stored with the post office and kept on record…but is not mailed back to you as a standard practice…
“Return Receipt Requested” is an additional service that you can add to a standard certified mail piece. Everything remains the same except that the signature record is mailed back to the sender.
There is very little practical difference between certified mail and certified mail with return receipt requested. In both instances, the mailing is tracked with a tracking number, it gets priority treatment from the United States Postal Service, and a signature is required and collected at the time of delivery. In both instances, the signature record is stored with the United States Postal Service.
For those sending Notice to Owner documents, if a statute explicitly requires delivery by certified mail with return receipt requested, the sender must comply with that hard requirement. Otherwise, however, there are a series of reasons why the “return receipt requested” service ought not be added to the mailing, not the least of which is that it will fortuitously add over $2 to every mailing.
Is it a Best Practice to Just Always Send Every Mail Piece by Certified Mail Return Receipt Requested?
Attorneys love to advise that clients do certain things “in an abundance of caution.” If you ask an attorney whether to send something by certified mail or by certified mail return receipt requested, you’ll likely be told to just send the mail piece with the “return receipt requested” service. There are a few unfortunate reasons for this, but mostly, this is a lazy CYA (i.e. “Cover Your Ass”) answer that seems like it will be enough in the event of a dispute over the mail piece.
However, as this section will explore, this is not the correct nor best answer. In fact, it is very likely a bad answer.
1) Why do more and spend more than you should?
Sending a mail piece with return receipt requested when it’s not required is like being asked to run a marathon but running 35 miles instead of the required 26, just to make sure. Running the extra 9 miles is an arbitrary extension of the requirement. There’s no stopping you from just running 40 miles, or 45 miles, or more; and the same can be said about adding extra services to a mail piece. Those who commit to sending something with return receipt requested when it’s not required might as well keep going by adding “restricted delivery” service, or skipping the mail system all together and getting the document served by a local sheriff.
The additional “return receipt requested” service also comes with extra expense and headache.
It’s like being asked to run a marathon, but running 35 miles instead of the required 26, just to make sure. Regarding cost, adding the service to a mail piece will add between $1.35 (electronic) and $2.70 (traditional) to the cost of the mailing. This can really add up for a company who sends a medium or high volume of preliminary notices. Companies that send notices on approximately 10,000 projects each year, for example, would wind up spending about $50,000 in superfluous postage. That’s a measurable amount of money to waste.
Regarding headache, adding the service to a mail piece increases the overhead in managing the mailing, resulting in sending parties being required to do more to send and track the mail piece. This happens most obviously during the sending process, whereby companies must go through some extra effort and expense to prepare the mailing with the return receipt service. However, as this next point will explore, the real headache is in the potential extra work and liability associated with the mail piece after it is sent.
2) Choosing to send with return receipt requested can actually create unnecessary burdens and legal obligations
Ever heard of the saying “what you don’t know can’t hurt you?” It may be appropriate for those deciding whether to add the “return receipt requested” service to their certified mailing.
When a mail piece is sent with the “return receipt requested” service, a signature is returned to the sender demonstrating who received the mailing. This threatens to create a new duty upon the sender to review that signature and verify that it is who was supposed to receive it. If the signature comes back and it is not the appropriate recipient, there is some precedent that this puts the sending party on notice that the document did not get correctly delivered.
As precedent for this, consider a Michigan appeals court’s discussion in Thomas Indus. v. C & L Elec. (1996). In this case, the “notice” information was placed onto a supplier’s standard packing slip, and the supplier argued that delivery of the notice information through this slip was sufficient and a separate notification was not required. The primary reason why the court rejected this argument was because there was “no evidence that the packing slips were received or seen by…the persons who would have received and been responsible for receiving the notice” at the receiving company.
This potential duty to review the return receipt signature and make corrections is explained well by an Ohio court in Seemiller v. Amato, as follows:
“[w]hen any notice…is either returned without the required receipted personal signature of the addressee or under other circumstances raising a significant doubt as to the actual receipt of such notification by the named addressee or is not returned or acknowledged at all, then…the [sender] must exercise reasonable efforts to discover the whereabouts of such person or entity and notify him.”
Seemiller v. Amato, 82 Pa. D. & C.4th 353, 354 (C.P. 2007)
Fulfilling a state’s Notice to Owner requirement mandates that a sender exert a “reasonable effort” to transmit the notice. In most states, the statutes set forth that depositing the mail piece with the standard certified mail service satisfies this reasonable effort standard, and that the effort is completed upon mailing. However, electing to go above and beyond by arbitrarily adding the “return receipt requested” service threatens to increase the sending party’s duty, placing a new, unnecessary burden on the sending party to review all of these return receipt cards and make certain that the signing party is the party who was supposed to receive and sign the mailing.
3) It will almost never change the outcome of an actual case
Upon receipt of a “return receipt” signature, many will presume that the recipient is then incapable of denying receipt. However, this is not the case, and recipients can still argue they didn’t receive the notice or have any “actual notice” of the document. Despite this, courts have consistently found that the actual delivery of the notice is immaterial.
This happened in a 1999 Georgia case that made it all the way to the Supreme Court. In that case, a notice was sent by certified mail with return receipt requested and signed for, but the recipient still argued that they did not get the notice and that due process was violated. Fortunately for the sender, the Georgia court didn’t even have to get into the nuance of whether the return signature was or was not actually the intended recipient’s signature, and that’s because the Georgia Supreme Court called the actual receipt of the notice immaterial to the compliance requirement:
…this Court plainly determined that when…[a notice is] mail[ed]…correctly addressed…the actual receipt, or want of receipt,..is immaterial to the right[s].
Parks v. Bank of N.Y., 279 Ga. 418, 420 (2005), see also McCollum v. Pope, 261 Ga. 835 (1992).
In this particular case, the Georgia Supreme Court was considering a statute that actually did require certified mail with return receipt requested (Ga. Code Ann. § 44-14-162.2). Nevertheless, despite the explicit requirement in Georgia that “return receipt requested” be attempted, proving actual delivery was unnecessary.
When return receipt is not required, having the return receipt in hand will almost never positively change the outcome of the case. As stated in the above Georgia Supreme Court case, and explained more fully in this article’s next section, this is because the actual delivery of the notice is typically immaterial to whether the notice requirement was met.
The Burden of Proof to meet Notice to Owner Requirements
The notice to owner is a precautionary document, and you’ll never need it until you need it. Nevertheless, the time will most certainly come when you’ll be called upon to prove that you sent the notice. In fact, if you aren’t taking measures to later prove that you met a state’s notice requirement, then you might as well just not send the notice at all. Without such proof, any sent notices will ultimately be worthless.
This begs the questions, however, of what exactly you’ll need to prove a state’s notice requirement was met.
Since most Notice to Owner documents must be sent by certified mail, the required “proof” usually centers around whether the sender has the burden of proving that the document was mailed as required, or whether the document was actually received by the recipient. Since construction notices are just one of many notices that rely on delivery through mailing, this area of law is pretty well developed. In fact, all across the United States, courts have very predictable rules about what a sender must prove when delivering a notice through mail. These rules are sometimes referred to as a “presumption of delivery” or a “mailbox rule.”
The typical way courts will approach proving compliance with a mailing requirement was nicely explained, as follows, by a Minnesota appeals court in a case analyzing the sufficiency of a lien notice:
Generally, service is complete when the paper is properly mailed…The risk of failure of the mail is on the person to whom it is addressed. Certified mail is a service that provides a mailing receipt to the sender and a record of delivery at the office of address. The use of certified mail fills the function of ensuring receipt by a person of suitable age or discretion at the person’s last known address and is thus reasonably calculated to provide notice to the affected person. While service by certified mail raises a presumption of actual notice, such notice may be found where the certified mailing is properly directed to the intended recipient, even though not actually received by them. Due process requires only that notice be reasonably calculated to reach interested parties.
Har-Ned Lumber Co. v. Amagineers, Inc., 436 N.W.2d 811, 815 (Minn. Ct. App. 1989)
Stated within this above quote is a phrase that gets repeated over and over again by courts when analyzing a statutory mailing required: “The risk of failure of the mail is on the person to whom it is addressed.” The vast majority of states and courts adhere to this interpretation of any notice mailing requirement, and the reasoning behind the rule is further explained by a 1981 Maine case, Cummings v. Oakland, 430 A.2d 825, 829 (Me. 1981):
The words “shall notify” taken by themselves, may in some contexts import a requirement of actual notice or receipt of notice by the person to whom notice is to be given. Such import is negatived, however, where other language specifies the manner in which the notice is to be given. In such context, the clear intent of the language is that utilization of the notice mechanism provided for in the statute satisfies the statutory requirement of the giving of notice. In short, if the municipality sends the notice by one of the methods prescribed by the statute, it has given notice within the contemplation of the statute.
This construction is supported by the fact that the statutory language at no point refers to receipt of the notice by the property owner or to acquisition of “actual knowledge” by the property owner.
Cummings v. Oakland, 430 A.2d 825, 829 (Me. 1981)
When sending a Notice to Owner document, companies should concern themselves less with taking an “abundance of caution” approach, and instead should look to the statute and case law to determine the most critical question: Is there anything to suggest that the default rule, above explained, would be over-ruled by something specifically requiring proof that the notice was actually received. If actual receipt must be proved, adding return receipt service, as well as restricted delivery service, is a good idea. Otherwise, however, the best practice is to send the document by standard certified mail only.
Examples: When You Must Only Prove A Notice Was Sent
In most states, those sending preliminary notices or notices to owner will only be required to later prove that they sent the documents as statutorily required.
This is frequently made clear within the statutory requirement itself, as is the case in California, where California Code § 8116 explicitly provides that preliminary notice is “deemed to have been given…when deposited in the mail” in the appropriate manner. If the statute isn’t explicit like this, the courts will interpret whether the sender has a burden to prove the sending or receipt of the notice by analyzing the statutory language in a way similar to the above examples in Maine (Cummings v. Oakland) and Minnesota (Har-Ned Lumber Co. v. Amagineers, Inc.).
So long as the statute doesn’t have anything specifically indicating that “actual receipt” is required, the general proof of sending is all that will be required.
In the state of Washington, for example, the court in Baker v. Altmayer, 70 Wn. App. 188 (1993), review denied, explained that the states preliminary notice to owner laws did not infer a requirement for “actual notice” or receipt of notice by the owner. The sending party was “not required to show actual receipt of the notice,” but instead needed to prove only that the item was deposited in the mail in the manner required by the statute.
Another example can be found in Georgia where the statutory Notice to Owner and Notice to Contractor requires simply that a mailing be sent by standard certified mail. There are other Georgia statutes that require notices be sent by certified mail with return receipt requested (i.e. Property sale made on foreclosure § 44-14-162.2, Tort claims against the state § 50-21-26, Enforcing mandatory education on parents of children § 20-2-690.1, etc). However, even when return receipt requested service is required in Georgia, the Supreme Court has still made it crystal clear that actual successful delivery is “immaterial.” See, for example, Parks v. Bank of N.Y., 279 Ga. 418, 420 (2005), see also McCollum v. Pope, 261 Ga. 835 (1992).
Finally, an interesting Minnesota case highlights how much more important it is to follow the sending requirements than to prove actual receipt. In Pella Products, Inc. v. Arvig Tel. Co., 488 N.W.2d 316, 318 (Minn. Ct. App. 1992), a Minnesota court determined that even though a party acknowledged receiving a first-class mailing of a mechanics lien statement, since it was not sent by certified mail exactly, the requirement was not met! As stated by the Georgia court in the Parks case…actual receipt is immaterial. The requirement is to send the document according to statutory specifications.
Examples: When You Must Prove A Notice Was Actually Received
There are some exceptions to the general rule that a legal notice must merely be sent in order to be effective. However, as you’ll see from the below examples, these exceptions only apply when there is statutory language within the notice law explicitly excepting the notice from the general rule and mandating actual receipt.
Statutory examples of this can be found in Kansas and Ohio.
In Kansas, K.S.A. § 60-103 specifically enumerates that: “[t]he term ‘restricted mail’ as used in this chapter means mail, sent postage or other delivery fees prepaid, that is endorsed on its face pursuant to applicable postal regulations so that the sender will receive a return receipt notification with the date and address of delivery, and, if the addressee is a natural person, only the addressee or an authorized agent will receive the mail.” In interpreting this statute, a Kansas court in Owen Lumber Company v. Chartland (2007) rejected the “presumption of delivery” principal since the legal provision in the lien law explicitly required return receipt. Specifically, the court stated that “[w]ith respect to mechanic’s liens, the restricted notice requirement of Kan. Stat. Ann. § 60-103 replaces the presumption of delivery with the sureness of proof by the return receipt.”
In Ohio, Ohio Revised Code § 1311.19 (A)(2) has language similar to the Kansas example, whereby it implies a requirement for use of “return receipt requested” with the requirement for delivery by “[c]ertified or registered mail, overnight delivery service, hand delivery, or any other method which includes a written evidence of receipt.” Reviewing this language, an Ohio court has determined that it is sufficient to overrule the “mailbox rule” or “presumption of delivery rule” that would otherwise apply. In Hanson Aggregates Davon, LLC v. J & H Reinforcing & Structural Erectors, Inc., 2014-Ohio-4832, ¶ 18 (Ct. App.) the court stated that “[t]he statute clearly contemplates that mailing a document by certified mail will provide written evidence of receipt. Thus, we cannot conclude that requiring Appellant to provide written evidence of receipt is contrary to a plain reading of the statute, when actual receipt is disputed by Appellees.”
Other courts that have exempted certain lien statutory notices from the general presumption of delivery rule include Maryland, which requires actual receipt pursuant to a 1991 case, Mardirossian Family Enterprises v. Clearail, Inc.. It also includes Illinois, where the burden is on the sending party to prove receipt of a notice whenever a statute calls for the use of “return receipt requested” service. Nat’l City Mortg. v. Hillside Lumber, Inc., 2012 IL App (2d) 101292, ¶ 1, 359 Ill. Dec. 388, 389, 966 N.E.2d 1076, 1077.
In fact, a good general rule of thumb is that if the statute specifically calls for the use of “return receipt requested” service, then the courts will exempt the notice from the general presumption of delivery rule and require proof of actual receipt. Conversely, if the statute does not call for “return receipt requested” service, the general presumption of delivery rule will apply.
Nevertheless, the presumption of delivery rule is so strong in American jurisprudence that many courts will apply it even when a statute explicitly calls for the use of return receipt requested service. Such is the case in Georgia, where the Georgia Supreme Court calls the actual delivery of a legal notice “immaterial” so long as it was mailed pursuant to statutory requirements (i.e. Park). It is also the case in Colorado, where a mechanics lien statement must be sent by certified mail, return receipt requested; but even then, proving that the mail piece was sent according to the requirement is enough because, otherwise, “adding the implied requirement of actual receipt to this statutory scheme would likely have the paradoxical effect of creating uncertainty and controversy, if not rendering meaningless the alternative to personal service which the statute expressly authorizes.” 6S Corp. v. Martinez, 831 P.2d 509, 511 (Colo. App. 1992).
More Sophistication About How You Send and Track Notice To Owners Overall Will Best Protect Your Lien Rights
A successful Notice to Owner program is just a microcosm of a successful security right program. A company should strive to always be in control of their security position, such that when an account starts to age, leveraging the security right will be available.
In regards to the Notice to Owner delivery, this means having certainty that the correct document was sent in the correct way to the correct parties, and ultimately, having the proof you’ll need to meet your burden in court. However, as demonstrated in this article, having this type of certainty about a Notice to Owner delivery is not simple. It cannot be satisfied by taking an “abundance of caution” approach. The best approach is a tailored, intelligent, and managed approach.
This all boils down to employing more sophistication about how Notice to Owners are sent and tracked.
Sending a Notice to Owner is complicated. On a case-by-case basis, it must be determined what type of notice document to send, who to send it to, when to send it, and how to send it. Each of these determinations can present complexities, and that is especially true for the last determination: how to send the notice to owner.
Notices to Owner may be sent by different mail types, such as certified mail, registered mail, or mail with return receipt requested service or restricted delivery service. Notices to owner may also be sent by hand delivery, overnight delivery, sheriff, or other service methods.
Too often, the different options in how a notice can be delivered will confuse sending parties, and this is most commonly seen when parties decide whether to send a mail piece by standard certified mail or certified mail with return receipt requested. Just taking an “abundance of caution” approach and sending everything with the “return receipt requested” service, however, may be more than unnecessary; it may also add unnecessary burdens and legal obligations on the sending party.
Accordingly, companies should be familiar with the burden of proof that will be required to send a notice, and should emphasize using a sophisticated technology product, like Levelset’s platform, to handle all of the nuances and to maintain a process of sending notices with a high degree of system integrity.