Sending a North Dakota 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 North Dakota.
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Notice of intent to lien
North Dakota preliminary notice requirements for:
General contractors are not technically required to send notice; however, it's always a good practice to increase transparency on the job.
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 send notice on private projects if not contracted with the owner.
Notice must be sent within 10 days before a lien
Notice can be sent late
Notice must be sent to the owner
The required pre-lien notice in North Dakota may be filed after the 80-day deadline (10 days prior to the 90-day deadline in which to claim a lien) but a claimant must wait at least 10 days before filing the lien claim.
Subcontractors and suppliers DO NOT need to send notice on public projects.
It is generally a good idea, however, to provide preliminary notice even when not required to promote project visibility, open channels for communication, and streamline payment.
Sending preliminary notice in North Dakota can be tricky, so it's important to get all the details right. Understanding what notice is required, when to send it, and what effect it may have are complex questions. And, if you're receiving prelims, it's important to know what you're looking at and know what to do in followup. This can be a difficult and tedious process for everyone involved. Here are some frequently asked questions (and answers) about the North Dakota preliminary notice process.
Do I Need to Send a North Dakota Preliminary Notice?
Yes. North Dakota imposes mandatory notice requirements for a valid mechanics lien claim, as well as providing for optional notices that may be provided to the owner by a potential lien claimant other than a primary contractor.
An optional notice may be provided to the property owner by a potential lien claimant other than a prime contractor for two purposes, and in two situations. The first potential reason is to give notice to the owner to withhold funds from the prime contractor in an amount necessary to cover the claimant’s lien, and to pay them directly.
The second potential reason is to retain the ability to claim a lien against solely the structure separate from the underlying property. It is possible for a laborer or material supplier to claim a lien on only a structure (without affecting the underlying property) provided that the project is the construction of a complete, independent, and original new structure. In order to claim this type of lien, a specific optional notice must be provided to the property owner.
When do I Need to Send a North Dakota Preliminary Notice?
The optional preliminary notice for lien on both land and structure may be provided at any time prior to the lien itself (perhaps prior to the mandatory notices, as well.)
The optional preliminary notice for lien on solely the structure must be received by the owner at the time of delivery of the materials.
The mandatory notice prior to filing a lien must be served on the property owner at least 10 days prior to the lien claimant recording the lien. This means that for a timely lien claim, the notice must be provided no later than 80 days after the date of last furnishing of labor and/or materials.
What if I Send the North Dakota Preliminary Notice Late?
The optional notices are not required to be filed, so they cannot technically be filed late. Further, the optional notice for a lien on both the land and structure may be given at any time prior to the filing of the lien.
If the optional notice for a lien on solely the structure is not delivered to the owner at the time of delivering materials, the lien claimant is not allowed to claim only that particular type of lien.
How Should the North Dakota Preliminary Notice be Sent?
The optional notices to owner must be “served” or “delivered” to the owner. This requirement is likely best met by sending the notice to the owner by certified mail, or certified mail, return receipt requested. However, since these notices are not required, any type of delivery is sufficient if actually delivered to the owner; sending by a method that allows delivery tracking provides this information.
The mandatory notice to owner prior to filing the lien (“Notice of Intent to Lien”) must be sent to the property owner by certified mail. Sending by certified mail, return receipt requested, should also satisfy this requirement if the lien claimant wishes.
Is the North Dakota Preliminary Notice Requirement met when sent or delivered?
Notices of Intent to Lien are considered delivered when mailed by certified mail. It is unclear whether the mailing of the optional notices meets the requirements for service or delivery if not actually received.
Do I Need to Send a North Dakota Preliminary Notice?
No. North Dakota does not require preliminary notice to be sent to preserve the right to make a claim on the contractor’s bond on a public project if the claimant is otherwise entitled to make a bond claim. However, any party may send notice if they so desire.
If the debts giving rise to a mechanics lien claim have been paid, then that lien should be released. Even if there are future debts that may have to be paid - that doesn't serve as a valid basis for leaving a prior lien intact. Levelset discusses that idea here: Do you Have to Cancel a Mechanics Lien, or Will It Expire? Generally speaking, a second lien claim could likely be filed later on - and that'd probably be more appropriate. Granted, when releasing a lien on an ongoing job, it's crucial to make sure that release won't block future lien filings. Sometimes, lien releases will relinquish all future rights on the project - so it'd be wise to make sure the release simply releases the filed lien document because the specific debts on that lien have been paid.
Is it legal (or enforceable) for a customer to ask us to waive our lien rights in North Dakota?
In the state of North Dakota, there is no specific law that prohibits the use of what we refer to as "no-lien clauses" in a contract (i.e. waiving lien rights through a contract). This can be a huge red flag for contractors. You may want to try and negotiate different terms to protect yourself against non-payment.
North Dakota has interesting preliminary notice requirements and possibilities. While notice prior to claiming a lien in North Dakota is required, there are also multiple non-required but impactful preliminary notices that may be sent on certain projects.
The specific required pre-lien notice in North Dakota is set forth by North Dakota’s construction Lien Law (§ 35-27-02), and is more akin to a notice of intent than a traditional preliminary notice. That section states that any person performing work or furnishing labor pursuant to “a contract with any agent, trustee, contractor, or subcontractor of the owner” must provide written notice that a lien will be claimed by certified mail at least 10 days prior to recording the lien. It appears that this requirement only extends to parties other than those who contract directly with the GC, but this appearance is based on paragraph formatting and not completely specific and clear text. Accordingly, it may be best practice for a direct contractor to provide the notice, as well.
North Dakota law also contemplates a couple optional notices that may be provided to the owner by a potential lien claimant other than a primary contractor. While not required, and not influential on the ability of a claimant to file a general mechanics lien, if the need arises, the optional notices do have actual tangible impacts on a project participant’s rights. Depending on the type of optional notice provided, there are two distinct potential benefits.
The first optional notice, provides notification to the owner to (potentially) withhold funds from the GC and pay the noticing party directly. North Dakota law states that “[a]ny such person having a lien under the contractor in accordance with section 35-27-02 may serve upon the owner at any time a notice of that person’s claim.” For the purposes of identifying the claim amount the owner may withhold from the GC. The wording of the statute is a bit confusing, however, as it is unclear whether this is a notice divorced from the lien or only a notice of a specific lien claim already made. It appears that this is a separate notice and can be provided to give information regarding the amount due if the participant has a lien right even if unperfected, however.
The second potential optional notice relates to an interesting aspect of North Dakota lien law. It is possible, in North Dakota, for a laborer or material supplier to claim a lien on only a structure (without affecting the underlying property) provided that the project is the construction of a complete, independent, and original new structure. In order to claim this type of lien, a specific optional notice must be provided to the property owner.
How to send preliminary notice in North Dakota (DIY)
Our forms are created by construction attorneys to meed the strict requirements under North Dakota statutes, making it easy to get this part right.
Fill the form out
Be careful! Accuracy is important.
Be careful when filling your preliminary notice form out. Making a mistake on your form could cost you the right to file a North Dakota mechanics lien if you’re left unpaid. Include all required information, and make sure it’s completely accurate.
Deliver the preliminary notice
The last step is to deliver your preliminary notice. Whether you’re sending an optional notice or a mandatory one, the best practice is to send it via certified mail, return receipt requested. In most cases, you need to send the notice to the property owner.
How to send a Preliminary Notice with Levelset
Select Preliminary Notice document.
Provide basic job information.
Levelset sends the document for you. Postage included!