We sent a preliminary notice for a public job in Kentucky and Boone county recorded the document as a lien. Which is in turn causing the owner of the project, the City of Florence to withhold payment. According to the Boone county recorder this is how they "file" the prelim it is actually processed as a lien so our only way to "release the prelim" is to release the lien. In the future I am trying to make sure that we have coverage for our projects in Kentucky. How should a prelim be handled ? Who should it be sent to ? Does it have to be filed with the courthouse because they are not treating them as a prelim but are treating it as a lien.
It is outside of the norm for a preliminary notice to be filed against a public project in Kentucky. First, although a preliminary notice is mentioned in KRS 376.210(2), it is NOT mentioned in KRS 376.210(3) which specifically refers to projects owned by a governmental entity. Second, it is highly unusual for any public project in Kentucky to not be covered by a payment bond.
To answer your question, since you have filed a document pursuant to KRS 376.210, it is technically proper for it to be filed as a lien at the courthouse. If you have perfected it, the City must withhold the money claimed from the unpaid funds due the GC.
I would be concerned about KRS 376.220(3) which provides:
If any person files a statement asserting a lien against any contractor on any fund due the contractor, for an amount in excess of the amount actually due, the person filing the lien shall be liable to any person damaged thereby to the extent of such damage, including reasonable court costs and attorney's fees incurred by the injured parties. Any such claim for damages may be asserted and prosecuted in the county in which the lien statement was filed.
Please contact an attorney