Most states require that construction industry participants send some sort of preliminary notice to make their presence on the project known and to retain the ability to later file a mechanics lien, if needed. In the states where a preliminary notice is required, the notice must contain certain information and must be sent to certain interested parties. The requirements that the notice be provided to certain parties spring from the origin of the preliminary notice requirements themselves.
These notices were developed as a protection to property owners (and occasionally other parties) so that they weren’t surprised by liens from “hidden” parties on their projects. Since the property owner bears the ultimate responsibility for payment, and has the most at risk, it was generally decided that parties should inform the owner of their participation on the project so that the project’s payments could be sufficiently managed by the project owner to protect against liens.
Like mechanics liens themselves, preliminary notices have strict statutory requirements. Failure to meet these requirements can result in the preliminary notice not being effective to maintain lien rights.
Given these specific requirements, then, what should you do if you don’t know some of the required information? Is it still worth sending the notice? Will you remain protected?
First Things First – Always Send Notice
The quick answer to the question of whether preliminary notice should be sent even if some of the information is missing is an unequivocal “Yes.”
Many of the same reasons that sending notice on all projects (even if not specifically required to maintain lien rights), also apply to sending preliminary notice without complete information. If payment can be prompted by sending any notice, or even if sending the notice can increase the likelihood of payment even a tiny bit – that notice should be sent, regardless if the information it contains isn’t 100% complete or accurate. Sending an incomplete notice – as opposed to not sending the incomplete notice at all – can only help you.
While everybody should always strive to include all relevant information and to prepare and send completely sufficient notices, in most cases the notice is received, noted, and then put away or tossed. As a practical matter, preliminary notices rarely get sent to a construction attorney to be checked to see if all of the notice requirements have been met.
In other words, the upper-tier parties receiving notice (“upper-tier parties” = project owners, general contractors, and occasionally sureties or lenders) make note that the notice was received, and who it was received from. Then, when it comes time to make payments, they will prioritize those invoices/pay-apps where notice was received over the invoices/pay-apps from companies that didn’t send notice at all.
It’s only if there are significant payment issues that the preliminary notice would be examined (likely by a construction attorney) for legal sufficiency. Making as many parties as possible aware of your presence on and contribution to the project is the beneficial to getting you paid on time, and sending notice to the parties you know can help.
Liens are a last resort, a powerful last resort that nobody wants to lose to be sure, but a last result nonetheless. Lien rights management isn’t just about filing liens – it’s more about getting paid.
Do Your Best to Find Out Who’s on the Project
Many states have other, additional notices that provide all the information you need to fully complete your preliminary notices, and also, provide methods for construction parties to obtain this information. Notices of commencement are relatively standard documents in a handful of states, and generally these documents provide information regarding the property, project owner, GC, and more – and are made available other project participants, either by search or through request.
In most cases, notices of commencement are filed in the same office in which mechanics liens are filed. A search of filed documents related to the particular property can turn up a document with all of the information you need to complete your preliminary notice correctly. As well as being recorded, many notices of commencement are posted on the project site itself, and can be requested by project participants. Usually, if a notice of commencement is requested, it must be provided within a certain amount of time, or the requesting party is relieved of certain notice requirements.
There are other ways to find out the required parties on a project. One easy, often overlooked way is, you can simply ask. This can be accomplished by letter, phone, or in person – or, if you want to streamline the process, through a request for information on the notice itself.
Since it’s always a best practice to send preliminary notice – even if the notice may not have 100% of the parties identified – it makes sense to send what you have, and use that same notice document to request the rest of the information. If you get the requested information back, you can re-send the notice with all information complete. The laws of many states provide for just this type of request for information, and mandate that certain project information be provided to a requesting project participant.
Know Where to Look
Finally, you can use outside resources to help you obtain the project information. If, for example, you routinely need property owner information – you can use county assessor websites or property databases to fill in the gaps. For most missing project information, you can use a project research team like Levelset’s Scout team, or Dodge construction data to find out what you don’t know. There are resources available to help you get information about your project – you just need to use them.
Strict compliance with preliminary notice requirements is always the best bet. But, the world’s not a perfect place. Even if you can’t get all the information, it’s generally worth sending a notice.
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