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How do preliminary notices apply to goods purchased out of state?

We have an opportunity to see product in bulk out of state. The purchaser wants to place us on 30 days net. While I am negotiating that detail, it non the less brings up the issue of potential non payment. How do preliminary notices apply to goods purchased out of state? I am sure they are available, my question is directed toward their enforceability. I am trying to avoid purchasing credit insurance and hope inter state purchases can and will be lien able.

1 reply

Oct 23, 2017

The applicability of lien rights, and the associated notice rules and requirements, depend on the location of the project - not the business location of any of the project participants. So, whether a party is entitled to lien rights (if they are a supplier to a supplier for example), the time by which a preliminary notice must be sent, and the form the notice must take, all depend on the project state not where the materials originated.

Generally, material suppliers are not required to be licensed - so many of the strict licensing requirements of many western states are not applicable.

Just delivering material to a different state, though, doesn't preclude lien rights. The supplier just must make sure to comply with the notice and lien requirements for the state in which the project the materials are used on is located.

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