Montana Preliminary Notice Guide and FAQs

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Montana Preliminary Notice FAQs

About Montana Preliminary Notice

Montana Preliminary Notice Rules
At a Glance


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Preliminary Notices May Be Required

Preliminary notice is supposedly generally required in Montana, but there are many exceptions.


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No Notice Required from GCs

An original contractor (a party contracting directly with the property owner and furnishing labor or material directly at the owner’s request) is not required to give preliminary notice in Montana.


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DAYS
Subcontractors Must Send Notice

Notice of Lien Rights must served on owner within 20 days of first delivering materials or labor and filed with recorder within 5 days of delivery to owner (unless one of the exceptions apply). If the project is not owner-occupied residential and is funded by a lender, the deadline is increased to 45 days.


20
DAYS
Suppliers Must Send Notice

Notice of Lien Rights must served on owner within 20 days of first delivering materials or labor and filed with recorder within 5 days of delivery to owner (unless one of the exceptions apply). If the project is not owner-occupied residential and is funded by a lender, the deadline is increased to 45 days.


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Notice Can be Sent Late

While a preliminary notice must be sent within the deadline to fully protect the noticing party, it can be sent late and still be at least partially effective. If the 20-day deadline applies, a preliminary notice protects the labor or materials furnished beginning 20 days prior to when the notice was sent. If the 45-day deadline applies, the notice looks back 45 days from being sent.


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Send to Owner - File with Clerk

The owner must receive the preliminary notice either by certified mail or personal delivery. Additionally, a preliminary notice must be filed with the county clerk.

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Preliminary Notice Required for some parties

Preliminary notice is required to be provided on public projects in Montana by any party who does not have a contract with either the public entity or the GC.


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N/A

On public jobs, any claims for non-payment are made against the general contractor's bond. 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.


30
DAYS
2nd-Tier Subs Must Send Notice

All parties contracting with a party other than the public entity or the GC must provide preliminary notice. Notice is not specifically required from 1st-tier subs, but it might be best practice to provide anyway.


30
DAYS
2nd-Tier Suppliers Must Send Notice

All parties contracting with a party other than the public entity or the GC must provide preliminary notice. Notice is not specifically required from 1st-tier suppliers, but it might be best practice to provide anyway.


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Notice Cannot be Sent Late

When required on a public project in Montana, the failure to send preliminary notice within the statutory deadline completely prohibits the ability to make a claim against the payment bond.


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Send to GC

Montana preliminary notice on public projects must only be sent to the GC. It may be a good idea, however, to also send to the public entity, and surety (if known).

Montana’s preliminary notice rules and requirements are complex, and not well or clearly defined by statute or the courts. While requiring preliminary notice is the default in Montana, the exceptions to the requirement nearly consume the requirement that preliminary notice be sent. The parties that appear to be specifically exempted from the preliminary notice requirement by statute are:

  1. an original contractor who furnishes services or materials directly to the owner at the owner’s request;
  2. a wage laborer performing labor for a contractor or subcontractor (employee of construction participant);
  3. any party furnishing labor or materials to a residential property for 5 or more families, when the work is done pursuant to a real estate improvement contract; and
  4. any party furnishing labor or materials to a construction project the is at least in part commercial in character, when the work is done pursuant to a real estate improvement contract. Some projects that may otherwise be residential can be considered commercial if separate work was done prior to the residential part of the project. JTL Group, Inc. v. New Outlook, LLP223 P.3d 912 (Mont., 2010)

When these exceptions are peeled away, it appears that the only parties technically required to send preliminary notice in Montana are: parties, other than direct contractors or laborers, working on completely residential projects on dwellings of less than 5 families.

Notwithstanding the foregoing, however, it is likely advisable to send preliminary notice anyway on most projects, just to be safe. There is little jurisprudence providing guidance on these issues, and other sections of Montana law seem to contemplate notices being required in other circumstances.

One of the circumstances that clouds the water with respect to preliminary notice requirements is the statutory section setting forth the calculation of the deadlines related to Montana preliminary notices. Montana law provides a preliminary notice deadline of either 20 or 45 days after first furnishing labor or materials to the project. The base deadline is 20 days, which applies in all circumstances other than those that give rise to the specific 45-day deadline. The 45-day deadline applies

“when payment for services or materials furnished pursuant to a real estate improvement contract, excluding a contract on an owner-occupied residence, is made by or on behalf of the contracting owner from funds provided by a regulated lender and secured by an interest, lien, mortgage, or encumbrance for the purpose of paying the particular real estate improvement being liened.”

So, breaking that down a little, the 45 day deadline applies to projects: 1) other than an owner-occupied residence; where 2) payment is made by a lender with a security interest in the property. Since, it appears from the exceptions above that notice is only required from some participants on residential projects of less than 5 “units” it appears the 45-day deadline would only apply to residential projects which are not the owner’s residence and are funded by a lender. And, accordingly, the 20-day deadline would apply to owner-occupied residential projects, and other residential projects that are not being funded by a lender.

Montana has another interesting rule regarding preliminary notices, as well. After the notice is sent (either by certified mail or personally delivered), it must also be filed with the county’s clerk and recorder within 5 days. Few states require the recordation of preliminary notices, but Montana is one of them. Even more rare, Montana specifically requires that, if a participant is paid after filing the preliminary notice, a release of notice must be recorded. Generally, since notices are usually not recorded, and do not encumber the property (since they are not liens themselves), there is no need to “release” them. However, Montana specifically requires that notices be released within 5 days of request from the owner if payment for the labor or materials subject of the notice has been made.

Finally, Montana allows a subcontractor who has not been paid to make a written request on the property owner to be notified when the property owner makes any subsequent payments. If this request is made, the owner must inform the sub of any progress or final payment made to the GC. There is, however, very little information related to this notice in the statute, however, as there is no specific time period, content, or delivery requirements outlined by Montana law.

Preliminary Notice Frequently Asked Questions

If you're sending preliminary notices in Montana, it's important to get all the details right. The rules, requirements, exceptions, and procedures are complex in Montana, so it pays to pay attention. If you're receiving prelims, it's important to know what you're looking at and know what to do in followup. Since prelims in Montana are subject to a lot of complex rules and requirements, this can all be difficult. These are some frequently asked questions (and their answers) about the Montana preliminary notice process.

Prelim FAQs on Private Projects

Do I Need to Send a Montana Preliminary Notice?

It depends. A preliminary notice is required in Montana, but certain potential lien claimants are excepted from the notice requirement. Despite the fact that some lien claimants are not required to give preliminary notice, it may be advisable to send notice anyway, as Montana courts have not provided sufficient guidance as to the meaning, scope, and application of the exceptions.

Notwithstanding the foregoing, the following parties are not required to send and file preliminary notice in Montana: 1) a party who furnished labor or material directly to the property owner at the owner’s request; 2) wage laborers; 3) a party who furnishes labor or material to a residential project for five or more families; 4) a party who furnishes labor or material to a project that is partially or wholly commercial in character.

When do I Need to Send a Montana Preliminary Notice?

Preliminary notice must be served on the property owner not later than 20 or 45 days after first furnishing of labor or materials to the project. The 20-day period applies to all projects other than a non-owner-occupied residence where payment is made by a lender with a security interest in the property.

Further, the preliminary notice must be filed with the clerk and recorder of the county in which the property is located. The notice must be filed within 5 days after notice was given to the owner.

 

What if I Send the Montana Preliminary Notice Late?

If the preliminary notice is sent late, all is not lost. If given after the 20- or 45-day period, the notice only covers work or materials furnished within the 20 or 45 days preceding the notice.

However, if the preliminary notice is required, it is a prerequisite to filing a valid mechanics lien. In that case, the preliminary notice must be filed with the clerk and recorder of the county in which the property is located prior to filing the mechanics lien.

How Should the Montana Preliminary Notice be Sent?

The preliminary notice should be served on the property owner either by personal service, or by certified mail, return receipt requested. If served on the property owner personally, a written acknowledgement of receipt from the property owner is required.

The notice must also be filed with the clerk and recorder of the county in which the property is located.

Do I Have to Send the Montana Preliminary Notice to Someone Other than the Owner?

Yes. The preliminary notice must also be filed with the clerk and recorder of the county in which the property is located. The lien claimant should also be careful to send the notice to all property owners of record.

Is the Montana Preliminary Notice Requirement met when sent or delivered?

In Montana, the notice is considered delivered when sent – if sent by certified mail, return receipt requested. If the notice is given by personal delivery, it is considered delivered when the property owner signs the written acknowledgment of receipt.

Public Jobs

Do I Need to Send a Montana Preliminary Notice?

It depends. All parties supplying materials or supplies to any subcontractor (or anybody other than the pubic entity or GC) must deliver preliminary notice to the general contractor to preserve rights to make a bond claim upon no-payment.

When do I Need to Send a Montana Preliminary Notice?

In order to retain rights to make a claim on the bond, a 2nd-tier or lower subcontractor or supplier must deliver the preliminary notice within 30 days of first delivery of materials or supplies.

What if I Send the Montana Preliminary Notice Late?

Failure to timely send the preliminary notice when required is fatal to a subsequent bond claim.

How Should the Montana Preliminary Notice be Sent?

When required preliminary notice should be sent by certified mail.

To Whom Must the Montana Preliminary Notice be Given?

Notice must be provided to the GC.

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How to file a lien in Montana

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Montana Preliminary Notice Form Template

The Montana preliminary notice form is regulated by statute. This doesn’t mean that the form has to look a certain way, but it does mean that the document must contain certain information. In fact, there is a long section of text and warning information that must appear on the preliminary notice exactly was it appears in the statute. The forms provided here for free by Levelset are compliant with the Montana rules and requirements. You can download them for free, or use our system to send or request them easily.

Montana Notice of Right to Claim Lien – Form Download - free from

Montana Notice of Right to Claim Lien – Form Download

Fill out the fields to download the free Montana Notice of Right to Claim Lien Form. This form may be used by any party on...

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