Cost of Preliminary Notices

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On January 26th, The US Postal Service increased the postage rates across the board, and you could be paying thousands of dollars more each year on your preliminary notices as a result.

The 2014 rate increases are as follows:

USPS Mail Service:   2013 Rate    v.    2014 Rate 

Certified Mail Fee                         $3.10                          $3.30

Return Receipt Green Card      $2.55                          $2.70

Return Receipt Electronic         $1.25                          $1.35

How is it more expensive?

Many states require that preliminary notices (or notices to owner) must be sent via certified mail or certified mail with return receipt requested. Depending on the type of project and your tier in the project, your company might need to send preliminary notices to three or even four parties for the same project.

Sending notices via certified mail (with return receipt green card) to three parties on one project adds up to $18. This is a postage increase of $1.05 per project.

While $1.05 per project might not seem like a large amount, if your company is sending notices on 100 projects per month, that’s an additional $1,260 in annual postage fees! 

In other words, that is an additional $1,260 your company should not be spending on postage.

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How to Avoid Paying More For Your Preliminary Notices

1. Send notices to only those who are required to receive them.

Make sure you know who is required to receive a notice before you send notice to the subcontractor who hired you, the general contractor, the property owner, the construction lender, etc.  Every state has different notice requirements, and you could be sending unnecessary notices (especially in Texas).

2. Use electronic return receipt

This one is pretty simple to understand.  Using technology to get rid of a manual process is a natural progression. After all, who wants to keep track of hundreds of green cards!

Using electronic return receipt can save your company $4.05 per project, or $4,860 using the example above. Electronic return receipt is not only less expensive, but it is a much easier alternative to organize.

3. Choose a service provider that doesn’t charge you for postage

Some lien service providers charge by “project”, then nickel and dime their customers for postage fees, research fees, filing fees, and any other items that might increase the cost of protecting their customers lien rights. A common example for this type of pricing is $15 per project plus postage.

If this pricing sounds familiar to you, you might want to take a look at your most recent bill. Using the example above, you could be paying up to $33 per project!

Rather than charging you for any additional fees associated with the project, lien service providers should charge you per project, with all the additional costs built into that price. There is one lien service provider that prices its services along these lines.

Think about it, how much could you save if you were to pay $27 per project and you never had to worry about the price of postage or any other additional fees?

Interested in learning how much your company can save on protecting its mechanics lien rights?

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