One of the most common objections I hear when speaking to material suppliers and subcontractors regarding preliminary notices is the concern that such notices will scare their customers. While this may seem logical at first glance, once you understand the true purpose, and practicalities, of preliminary notices, you’ll feel foolish for even considering not sending them.
Yes, you’ll realize that sending preliminary notices will not hurt your relationships. Moreover, you’ll see how these documents can be a gift that will help you get paid faster and foster stronger communication and goodwill between you and the people you do business with.
The Purpose of Preliminary Notices
Preliminary notices were introduced for the benefit of those at the top of the construction chain: property owners, general contractors, and lenders. While the mechanic’s lien right was created to protect parties providing materials and work to the job, preliminary notices were created to help those parties controlling the money to avoid having a lien filed at all.
Construction projects are complex, involving multiple parties that are not all aware of everybody else that is working on the job. Preliminary notices help combat this obstacle by providing visibility to the owner and general contractor about all parties involved on their project. By having knowledge of everyone, the owner and general contractor can make sure that everyone is paid, thus helping them mitigate the risk of having a lien filed. They want to receive preliminary notices.
Levelset goes the extra mile
Despite this clear logic, some subcontractors and suppliers still cannot get over their anxiety about sending notices. At Levelset, we take your relationships very seriously. We know that this is the foundation of your business, and so we go the extra mile to make sure the recipients of your preliminary notices understand their purpose.
With every notice sent, we include a cover letter to emphasize the strength of your relationships and the benefit this notice provides to its recipients. The current cover letter designs were established through testing multiple templates across thousands of notices – the feedback we have received (and continue to receive) is overwhelmingly positive.
Numbers don’t lie
How positive? Well, we give every notice recipient the ability to tell us how they feel about receiving the notice. See the response breakdown below:
- 29.2% responded positively, stating that preliminary notices are helpful. (Of these respondents, 61% like notices because they provide visibility)
- 55.8% provided a neutral response, noting that preliminary notices are part of everyday business
- 13.1% noted that notices provide extra work
- Only 1.9% stated that they felt mistrusted due to receiving preliminary notices
When you understand the purpose behind preliminary notices, there should be no reason to fear scaring the recipients — the notice is for their benefit after all! Beyond this, Levelset provides extra clarity to those recipients to make sure they understand why they have received the notice. Finally, we surveyed thousands of recipients and the data proves what we have preached all along. Only 1.9% of responders said they should be trusted enough to pay without any necessity of notices.
The benefits of sending notices on your company’s bottom line are proven. It would not only be a shame to waste this gift, but it would be irresponsible… especially to waste it due to false assumptions.
Talk to Us
If you’re having trouble getting paid on a project, we might be able to help. Let’s talk about getting you paid.