Whether required or not, sending preliminary notice on a construction project is one of the best way to secure payments, and get paid faster. We spend a lot of time at levelset educating our customers – and really, the entire construction industry – on the importance of sending these notice documents. Most everyone we talk to understands the importance of this task, but occasionally, the project participants that we encourage to send these notices (primarily, subcontractors, sub-subs, equipment rental cos., and material suppliers) will ask us if the parties receiving these notices find them useful. Do folks find it useful to receive preliminary notices on construction jobs?
In this article, we’ll discuss the many mutual benefits for sending and receiving preliminary notices at the start of every construction job, and we’ll also uncover what folks really think about receiving these documents.
Who Are the Notice Senders?
There are literally hundreds of thousands of construction documents sent through the levelset system each and every year by just about every conceivable type of construction company that exists. These companies range in size from small shops that primarily work in their local area, to billion dollar companies that have thousands of projects spread across the entire United States. But no matter the size of the company, the process is still managed by people – people just like you.
Sometimes, the person sending the notice is doing it simply because someone at their company told them they had to – it’s just one of their everyday duties, and they do it faithfully without giving it much thought.
Other times, the people sending notices truly understand the benefits it provides for their company, from speeding up payments to securing payments in case a payment issue arises on the job. No matter what the reason behind it, it’s still just natural for these folks to wonder about the people on the receiving end of these notices. Do the folks that receive the preliminary notices find it useful?
Good to Receive Preliminary Notice? ‘Yes Please’
We wanted to get a pulse on how folks feel about receiving these documents folks are mailing, and the results and feedback all liened (pun intended) in a positive direction.
Here’s a peek into some of the actual feedback that construction companies have provided to us about receiving preliminary notices:
“Know who we are paying”
“Gave us the ability to correct this [job information]”
“It let’s us see if the proper individuals are receiving the notice.”
“We had no idea our tenant wasn’t paying their bills!”
“Helps us determine joint check payments”
“Informs us what suppliers are being used on the project.”
Some companies have reservations about sending notices for fear that it will be disruptive to their business relationships. This is not the case. It’s been our overwhelming experience that sending notices is for the benefit of your customers and will help you build better business relationships.
Do Notices Just Create More Work?
Occasionally, there’s a fear that sending and receiving notices creates more work for everyone. Technically, it is work to send notices (though it couldn’t be any easier when you use levelset of course!), but the benefits of putting more effort into proactive communication and collaboration on the front end far exceeds the magnitude of work that created when there is a payment issue on a project that must be solved. You know that saying, “an ounce of prevention is worth a pound of cure?” Well, that absolutely applies here.
And that goes the same for receiving notices as well. Although you may have to put some effort into receiving the document, tracking on your end and requesting a lien waiver in exchange for payment, it is far better to receive notices and be aware of all of the companies that are on the project, rather than be blindsided with a “hidden” lien from a “hidden” participant. (By the way, hidden liens really do happen).
Notices Are Better for Collaboration
Mechanics liens and bond claims are in place to protect contractors and suppliers trying to get paid for the work they’ve done, and preliminary notices are designed to protect general contractors and property owners from having zero visibility into who is on their job and needing to get paid. Altogether, the lien and notice process promotes transparency and collaboration among all project participants in construction.
Talk to Us
Have you been stiffed on a project in the past? Are you worried about receiving payments on a project you’re on right now? As you can probably tell by reading this, we feel pretty strongly about the effectiveness of sending preliminary notices.
If you’d like to find out more, please give us a shout. We’d be happy to talk