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Notice of Intent to Lien Timeline

In Washington, we are required to file our lien within 90 days after our last day on the job. Typically, invoices are partially paid within 30 days by the insurance company (undisputed amount) and the remaining discrepancy will be the basis for our Notice of Intent to Lien. My question is, at what point during the 90 days should we be sending a notice of intent to lien to try and spur payment by either the insured or the insurance company? Preferably we would like to be paid by the insurance company to avoid negative reviews from the customer. Thanks Z

1 reply

Mar 12, 2020

Deciding when, exactly, to send a Notice of Intent to Lien will depend on a variety of factors, and what makes sense for one business won't always make sense for the next. But, with that in mind, let's look at some factors to take into consideration.

The mechanics lien deadline

You mentioned it in your question above, but it's worth reiterating: The mechanics lien deadline is crucially important when looking at when to utilize a Notice of Intent to Lien. A Notice of Intent to Lien should be sent with enough time before the lien deadline to allow the recipient time to get the funds together and make payment. And, ideally, it should be sent with enough time before the deadline so that the parties might be able to negotiate a payment plan or settlement. Washington's mechanics lien deadline is 90 days from the last date when labor or materials were furnished to the job. So, sending a Notice of Intent to Lien at least a week or two before that deadline should make sense. That'd provide a customer with an opportunity to respond, and it'd also allow the claimant to prepare their lien claim for filing - just in case. Of course, sending even earlier than that may make a lot of sense, too.

Keeping customer relationships intact

Maintaining a good rapport with customers and insurers is important, too. So, sending a Notice of Intent to Lien too early can be damaging as well. Claimants should probably allow enough time for customers or insurers to process invoices and mobilize funds. And, allowing a little extra time can help to nurture trust in those relationships. Obviously, there's a limit. If a customer is well behind on payments, and if there's been turbulence in the project, it may make sense to send a Notice of Intent earlier on some jobs than on others.

If it feels too early to send a Notice of Intent, sending a payment reminder can help

Finally, keep in mind that you don't have to jump straight to a Notice of Intent to Lien. Invoice reminders act like a gentle nudge in the right direction. Often, a simple reminder will get the point across and result in payment. If customers are reminded that your invoice is outstanding, and if they're given an opportunity to pay that invoice without threats or ugliness, that can help to build relationships, too. Payment reminders won't make sense for every situation - particularly when there's already a dispute over what should be paid. But still - they provide an opportunity to start the payment conversation, and if used properly, there will still be time to send a Notice of Intent to Lien or even pursue a mechanics lien.

Create a Notice of Intent to Lien policy that suits your business

It makes a lot of sense to formalize the decision process on when to send a Notice of Intent to Lien. Creating a credit policy for how long customers have before certain documents get sent will take some stress out of analyzing each individual situation. And, of course, you can always be more flexible with certain insurers, customers, project types, etc. For example, something as simple as the following might be a step in the right direction: "When a debt becomes X days overdue, we'll send an invoice reminder. When a debt becomes Y days overdue, we'll send a Notice of Intent to Lien. When a debt becomes Z days overdue, we'll file a mechanics lien." For more information on creating a credit policy: What Is a Credit Policy – And How Do I Make a Good One?

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