Sending a Maryland preliminary notice is an effective way to speed up payment on a construction project. A preliminary notice is an informational document typically sent to the property owner near the beginning of a construction project. Here's what you need to know about the rules and requirements for sending preliminary notice in Maryland.
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Notice of intent to lien
Maryland preliminary notice requirements for:
General contractors are not required to send notice on private projects.
General contractors are not required to send notice on public projects.
Since GCs will not make a claim against their own bond for non-payment, they do not have bond claim rights, and have no preliminary notice requirement.
Subcontractors and suppliers must provide notice of lien claim on private projects to protect their lien rights.
Notice must be sent within 120 days
Notice cannot be sent late
Notice is sent to the owner
Subcontractors and suppliers are not required to send notice on public projects.
However, on a state project, a subcontractor is required to inform the state procurement officer if the sub is aware the general received payment, but is late in making payment to the sub.
If you're sending preliminary notices in Maryland, it's important to understand the rules and requirements in order to make sure your notice is sufficient and compliant. Since prelims are subject to a lot of complex rules and requirements, this can all be difficult. And, Maryland is tough on notice. In the case, Tyson v. Masten Lumber & Supply, Inc., 44 Md. App. 293, 408 A.2d 1051 (Md. Ct. Spec. App. 1979), the Court expressly stated that improper notice will void a lien. These are some frequently asked questions about the notice process in Maryland.
When do I Need to Send a Maryland Preliminary Notice?
For parties required to send preliminary notice, the notice must be sent within 120 days from the date of last furnishing labor or materials to the project. Some special time requirements apply when the project is an owner-occupied single-family residence, however. In that situation, the notice must be given both within 120 days from last furnishing labor and/or materials, and prior to the property owner making full payment to the general contractor. For projects on an owner-occupied single-family residence, a mechanics lien is limited in amount to the amount due under the contract between the general and the property owner at the time the property owner receives the preliminary notice. Obviously, for a lien claimant in this case, the sooner the notice is delivered the more the lien claimant’s rights are protected.
How Should the Maryland Preliminary Notice be Sent?
Maryland preliminary notice should be sent by registered or certified mail, return receipt requested, or personally delivered to the property owner. Notice may potentially be given by regular mail, but, as the burden of proving that the property owner received the preliminary notice rests on the lien claimant, this is not prudent.
Do I Have to Send the Maryland Preliminary Notice to Someone Other than the Owner?
The preliminary notice must only be sent to the property owner. If there is more than one owner, notice sent to one owner is generally sufficient. However, if the lien is on a condominium project, preliminary notice must generally be sent to all condominium owners.
Does the State of Maryland have a mandated format for waiver and release forms? I'm familiar with those used in Cali.
No specific waiver and release document is mandated by law in Maryland, although your contract might have a specific form attached and incorporated as an exhibit. Of course, be careful you are not waiving claims for extra, changed or additional work (ie, a pending change order that has not been approved yet), retainage, any pending claims submitted, and work performed since the last billing period which the waiver relates to. Many "conditional" waivers will actually be final wiavers up to the date of the waiver, because the waiver releases all claims through the date of the release.
In Maryland, like in many states, preliminary notices are not required for general contractors or other parties with a direct contractual relationship with the property owner. Maryland does, however, require preliminary notice from subcontractors, suppliers, and others who did not directly contract with the property owner. This notice is kind of more similar to a notice of intent than a traditional preliminary notice since it must be sent within 120 days from the date that the project participant last provided labor or supplies, and can sometimes be called a “notice of lien” despite not being an actual lien itself.
For single-family residential properties, there are some special deadline requirements. The notice must not only be sent within 120 days from the last day, the participant last provided labor or supplies but additionally prior to the property owner, making full payment to the general contractor.
It’s further important to note that liens filed on owner-occupied single-resident properties are also limited to a specific worth dependent on the contract (between the property owner and the general contractor) amount due at the time the property owners received preliminary notice. While there are many reasons that it is best to send preliminary notices early in the project, since the ultimate goal is to provide visibility into project participants, it is worth additional attention when the amount available to be secured by a lien claim depends on the amount left to be paid when notice is received. This means that while Maryland can be an unpaid balance lien state, there is a mechanism in place for subcontractors and suppliers to ensure that is not the case and to be fully protected.
First and foremost, read the guide to preliminary notices in Maryland. It breaks down all you need to know about the notice, including who must submit one, when they should submit one, and who the notice must be submitted to.
This part can get tricky because you must take care when filling your preliminary notice out. That’s because under Maryland law, mistakes on your preliminary notice could void your right to file a mechanics lien if you need to. Check your form multiple times to make sure everything is completely accurate.
Deliver the notice
Lastly, deliver your Maryland preliminary notice. Make sure you send it within the 120 day deadline, and send it to the owner via personal service or certified mail, return receipt requested.
If the owner cannot be located and served, you can post the notice on the job site in a conspicuous place as a last resort. Take a picture as proof it was properly posted.
How to send a Preliminary Notice with Levelset
Select Preliminary Notice document.
Provide basic job information.
Levelset sends the document for you. Postage included!