If I had a nickle every time a client of mine was afraid to send preliminary notices because they didn’t want to “ruin a relationship” or “put their client on alert,” I would be writing this blog post on my own private island with sand in my toes. This is a sentiment I hear over and over and over again, but it’s incorrect. And here’s why.
Property Owners and Prime Contractors Expect It And Get Tons
On construction projects in states where preliminary notices are required, property owners and prime contractors will receive many pre-lien notices, and they expect to receive them.
On any given project, there may be fifty or one-hundred different trades, suppliers, equipment rental companies, and consultants. Some of these companies are small, but many of them are medium or large outfits who furnish materials or labor to projects across the country. And, of all these companies, those with quality credit policies are disciplined and send preliminary notices on every single project.
A property owner or prime contractor to an ordinary ground-up project or major renovation will likely receive more than twenty or thirty notices. No one gets terminated because of them. Notices usually get filed away and, in most cases, the property owner and prime contractor appreciate that you sent the notice. The notice alerts them to your work, the value of your work, and gives a good first impression that your company is organized.
It’s Not Adversarial and Hard To Mistake For A Lien
A preliminary notice is not an adversarial document. It makes no demand for payment and is very hard to mistake for a lien. In fact, it very commonly states at the top of the notice in all-caps bold type: “THIS IS NOT A LIEN.”
It’s very hard to mistake this document for a lien. In all my years of practicing construction law and helping companies send preliminary notices through Levelset, I’ve never had a preliminary notice mistaken for a lien, or heard a single complaint from someone who has received a preliminary notice. None of my clients have ever lost a customer because they sent off preliminary notices.
Also, put aside the idea that you have a choice in sending your preliminary notice. In many states, the law makes it mandatory that you send these notices. If you don’t send the notices, you are technically subject to penalty by a state regulatory body. Examples of this mandatory regulation are seen in Louisiana and Washington.
It Can Be Sent “Nicely”
Finally, the notice can be sent “nicely.” When we send preliminary notices through Levelset, for example, these notices go in non-adversarial packaging. We are always looking for ways to best communicate what documents are in order to keep your customer relationships in good stead. We know how important your customer relations ships are and can even help generate customer cover letters to be sent with your specified language.
Furthermore, many of our notices begin with, “Hello! This preliminary notice is sent according to our policy to keep our customers and their customers informed about who is working on their construction projects….” to put the receiving party even more at ease.