If you ever try to file a mechanic’s lien on your own to protect your right to be paid on a construction job, you will learn how complicated the lien process is. Even if you just read your state’s mechanic’s lien laws, you will see filing a mechanic’s lien is a difficult and confusing process. To help simplify some of the complexity, this article will focus on what is most often the first step: The Preliminary Notice.
notice of right to lien or a preliminary notice of intent to lien
Most states require you either file the preliminary notice of right to lien or a preliminary notice of intent to lien. Once you learn which notice is required in your state, you will hear it generally referred to as the “preliminary notice” without specifying which type. Since only one type exists in your state, everyone in your state’s construction industry will understand what you mean when you say preliminary notice. But what if you take a job in a different state?
performing work in a different state
If you decide to perform work in a different state, you will likely do your research to figure out when to timely and correctly serve a preliminary notice in that state. You may look up “preliminary notice” for the state, learn the deadline to file the notice of your intent to lien, then move on to the other state lien filing requirements. You may even correctly serve the notice of intent and file the lien perfectly. However, if you are in a two-notice state, your lien will be completely unenforceable.
Determine whether you are working in a one or two notice state
By referring to the notice of right to file and notice of intent to file a lien both as a “preliminary notice”, contractor’s fall into the trap of not knowing the difference between the two and, therefore, not discovering if the state requires both notices. To protect yourself against this trap, you need to know the difference between the two types of notices so you can determine whether you are working in a one or two notice state.
Notice of Right to File a Lien
As the name implies, a preliminary notice is a notice sent to an Owner and/or a General Contractor before your work starts or before you file a lien. If the notice is required before your work begins, the preliminary notice is known as a Notice of Right to File a Lien. This notice lets the receiving party know you are reserving your right to file a mechanic’s lien against the construction property if you are not paid for the goods or services you provide. If you fail to timely serve this notice, you will lose your right to file a lien to protect your right to some or all of the payments you are owed.
Notice of Intent to File Lien
If the notice is required before you can file a mechanic’s lien, then the notice is known as a Notice of Intent to File Lien. This notice informs the Owner you not only have the right but also the intent to file a mechanic’s lien against the property. This notice usually requires that you specify the work or goods you provided, unpaid amount you are owed for the good or services, and a description of the property you will file the lien against. If you don’t send this notice before your state’s deadline, your lien will be completely unenforceable, even if filed correctly.
The confusion in just giving preliminary notice is a small example of why mechanic’s lien laws are so difficult to navigate. If there is ever any question about how to comply with a state’s lien laws, you should contact a lien law professional immediately. Otherwise you will carry with you the burden of wondering whether you will have a way to enforce your right to be paid.
