What is a Preliminary Notice?
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Preliminary Notice FAQs
It's common to have questions about notices. There are tons of rules and lots of confusion. Dig through some of the most frequently asked questions here.
Map of Notice Requirements in the US
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Preliminary notices — sometimes called pre-lien (or prelien, or pre lien) notices or notices to owner (NTOs) — are sent at the start of a construction job.
These notices are sent by contractors or suppliers to let other job participants know who they are and what they are providing to the project.
Sometimes, they are required by state law to be sent. These notice laws are complicated and differ significantly from state-to-state and project-to-project. The rules about sending a “notice to owner” in Florida, for example, are different from the “20-day preliminary notice” requirement in California, and the “monthly notice” in Texas, and the lack of any notice at all in New York. The rule may allow notice to be sent long after the job begins on a commercial job – such as in Washington, where contractors and suppliers have 60 days to send the notice — but to be very short in the same state on a public or state job – such as the shortened 10 days on public jobs in Washington.
Most states require subcontractors and suppliers to provide the notice to key project stakeholders like the property owner, the general contractor, and the construction lender.
The notice does not create any mechanics lien or bond claim rights, however, it’s possible for a party to lose their lien and security rights if a required notice is not sent.
The notices must typically be sent by certified mail, certified mail return receipt requested, or by registered mail. You can learn more in this article: What is a pre-lien notice?
Getting paid in the construction industry is tough, and so the question for contractors and suppliers is simple: How to break through the mess and get your invoices paid? Notices are step one to getting paid in the construction industry.
Sending preliminary notices is common in the construction industry. Parties furnishing labor or materials to a project send these construction notices to protect their lien rights and to comply with local laws requiring these notices. Other parties, such as property developers, lenders, and general contractors, look forward to receiving notices from subcontractors and suppliers because they provide more visibility as to who is contributing to the job. In fact, our research reveals that more than 83% of notice recipients find the documents helpful, or just part of everyday business.
Since notices are helpful and promote better project transparency, they have the effect of prioritizing a contractor or supplier’s invoice above others who have not sent the notice, and thus get companies paid more often and more quickly.
Some companies already appreciate the benefit of sending notices and have sophisticated policies in place that need to be managed. Other companies are contemplating the costs and benefits of engaging in this best practice.
In either case, it’s common for administrators and finance professionals to spend a lot of time doing busy work like researching prelim notice laws, managing notice requirements, and handling the paperwork involved with preparing, mailing, and tracking notices. This is why it’s a good idea to use some type of service (or software) to help better handle preliminary notices. Take a look at our review of The 10 Best Nationwide Preliminary Notice Services.
Preliminary notices are also known as construction notices, notices to owner, NTOs, and pre-lien notices, but are distinguished from notices of intent to lien, monthly payment notices, and dunning letters; and they are sent at the start of a construction project before any payment disputes arise, and usually before any payments are due.
This page provides a guide, frequently asked questions, forms, and all the information you need to know about preliminary notices. Whether you’re collecting and receiving notices, or you’re sending them, this information will help you understand and master the construction notice document and process.