Pre Lien

What is a pre lien?

Most people consider a pre lien notice to be any notice or letter that a construction party (contractor, supplier, design professional, etc.) must give before filing a mechanics lien.  In other words, a pre lien notice is a preliminary notice.

Interestingly, however, after thirty minutes of scraping through all 50 states’ lien laws, I discovered that only two states — Mississippi and Oklahoma — actually use the word “pre-lien” (or “pre lien” or “prelien”) in their lien statutes. The vast majority of states require that one send this notice in order to later be able to file a mechanics lien.

Pre Lien Notices Have Many Names

Pre lien notices comes in all shapes and sizes — and names. Some states don’t give the notice a name, but simply refer to the required document as “notice.” More common names for these “pre lien” notices as outlined by state lien law include:

“Preliminary Notice”

“Notice to Owner” (used in 13 states including Florida, Colorado, Missouri, and Tennessee)

“Notice to Owner and Contractor” (used in Arkansas)

“Notice of Furnishing” (used in 4 states – Michigan, Ohio, S. Carolina, and S. Dakota)

“Notice of Right to Lien” (used in Oregon)

All of these notices must be sent at or near the time that one first performs work (furnishes labor or materials) to a project. Sometimes these notices can be sent before work even begins, though usually not before a contract is signed. However, there is one other document that often is grouped under the pre lien umbrella that has a different set of rules and uses: the Notice of Intent to Lien.

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Preliminary Notice vs. Notice of Intent

I’ve never studied latin, but I think I can do the literary math here: pre = before. Therefore, pre lien is anything that comes before a lien. There are two types of documents that one must or can send before filing a lien:

  1. Preliminary notice, notice to owner, notice of furnishing, etc. These notices are sent near the time that one begins work on a project, in order to notify GCs, property owners, and project lenders of one’s involvement on the project. We at Levelset call these types of notices preliminary notices, which is more specific than pre lien.
  2. Notice of Intent to Lien (NOI). NOIs do exactly what their name suggests. They give notice that you intend to file a mechanics lien if your payment dispute is not resolved. While several states require that one send an NOI before filing a lien, most contractors and suppliers voluntarily send NOIs in an attempt to get paid and avoid filing the lien.

Confusion often arises, however, around the meaning of the term pre lien. This is because some people use pre lien to refer to both types of documents listed above, and some people use it to refer only to the first document. For these reasons, we at Levelset separate these two notices into two categories : preliminary notice, and notice of intent to lien

In fact, in order to better communicate with our customers and readers, we classify the hundreds of lien documents that are relevant to private construction projects into one of five categories:

  1. Preliminary Notice
  2. Notice of Intent to Lien
  3. Mechanics Lien
  4. Mechanics Lien Release
  5. Lien Waiver

Conclusion

So, tomato, tomahto? I don’t think so.

First off, it’s important for contractors and other hired parties on construction projects to use the correct notice in order to secure lien rights, whether that be a 20 day preliminary notice, notice to owner, notice of furnishing etc. It’s also important to note the distinction between these preliminary notices and a notice of intent to lien.

Blending these two documents (which function very differently) into one group creates confusion and can exacerbate payment issues. Similar confusion surrounds the difference between a lien waiver and a release of lien (or lien cancellation). We get a lot of phone calls, believe it or not, from people who aren’t aware of the difference between a notice and a mechanics lien. So you can imagine how easy it is to mash together a preliminary notice and an NOI.

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What Is a Pre Lien?
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What Is a Pre Lien?
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Levelset
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