Notice deadlines can cause headaches for parties in the construction industry. Since the deadlines often have significant consequences for mechanics lien rights, or rights/obligations related to others’ mechanics liens, they should be paid attention to and marked in your calendar in red ink. While many states do not require preliminary notice be given by general contractors, Rhode Island does. Failure of the direct contractor to provide this notice requires the contractor to “indemnify and hold harmless any owner, lessee or tenant, or owner of less than the fee simple from any payment or costs incurred on account of any liens claims by those not in privity with them, unless such owner, lessee or tenant, or owner of less that the fee simple shall not have paid such person”. Newly passed amendments to Rhode Island’s mechanics lien law shortens the GC’s deadline to provide this notice, but also provides for more options.
Rhode Island’s old law for general contractors was fairly straightforward, contractors who contracted directly with the property owner had “10 business days” from the first furnishing of labor and/or materials to the project to send a notice to the owner. This notice had to sent “in writing, by certified mail, return receipt requested.” This is a fairly easy and straightforward requirement, but Rhode Island decided to modify the deadline and provide for additional means of providing the required notice. The new provision is also clear, but GCs should take note that, while they now have more options, they have less time.
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The new amendment made some modifications to §34-28-4.1 of Rhode Islands General Laws. This provision defines and provides the rules for the preliminary notice general contractors must send in order to be entitled to their lien rights. While the old deadline was 10 days after the commencement of work, the new deadline IS the commencement of work. The new modifications to the section provide that the notice may be given:
any time prior to commencing work or delivery of materials for construction, erection, alteration or repair . . .
Parties who contract directly with the property owner on Rhode Island construction projects should take special note that the old deadline has been shortened, and if work commences on the project prior to giving the notice, it’s too late. While this shortens the time frame to provide the notice, it also provides a new way that they notice may be given.
The new amendment to the requirement provides that the preliminary notice may be included in the contract, with no separate providing of the notice via mail required. This could streamline the process for direct contractors, and essentially do-away with their “notice requirement” provided the required notice language is added to their form contracts.
In the words of the Rhode Island legislative counsel, this amendment:
“eliminate[s] the requirement that notice under the provisions of the mechanics’ lien law be provided within ten (10) days of commencing physical work on the property, or upon delivery of construction, erection, alteration, or repair materials for the property, by authorizing the notice to be given at any time prior to commencing work or delivery of materials, either incorporated conspicuously in a written contract or sent by certified mail.”
With the ability to provide the required notice in the contract itself, the Rhode Island legislature has given direct contractors a way to do away with the notice requirement for practical purposes. By making sure that the required notice language is contained within the contractor’s form contracts, they can always be protected, as well as save money and decrease worry. However, if the notice is not contained within the contract, the contractor should pay close attention to the newly shortened time requirement, and make sure the notice is sent (via certified mail with return receipt requested) PRIOR to the first furnishing of labor and/or materials.