Ensuring that you get paid for your work is crucial. Payment disputes are common, and protecting your right to payment is essential for maintaining cash flow and avoiding financial difficulties. One of the most effective tools to securing your payment is the preliminary notice, also known as a pre-lien or 20-day notice. This document can make the difference between being paid in full and experiencing a significant financial setback. In this article, we’ll explore the importance of sending a preliminary notice and how it benefits everyone involved in a construction project.

What is a Preliminary Notice?

A preliminary notice is a legally required document sent at the start of a project. It is used to inform the property owner, general contractor, and any construction lenders of your involvement. This notice establishes your right to file a mechanics lien if you are not paid for your services and / or materials. While it does not create a lien itself, it is a prerequisite in many states to preserve your lien rights. Without sending a preliminary notice, you may lose the ability to file and enforce a mechanics lien, which is a powerful tool to ensure you receive payment.

Why is Sending a Preliminary Notice Important?

Sending a preliminary notice is crucial for several reasons:

1.  Protects Your Right to Payment: Preliminary notices are the first step in securing your payment rights. They are often legally required to preserve the right to file a mechanics lien, which serves as a powerful security interest in the event of non-payment.
2. Enhances Communication and Transparency: By notifying all relevant parties of your involvement, a preliminary notice helps establish open lines of communication. This transparency can prevent misunderstandings and disputes about who is owed payment for their contributions.
3. Ensures Legal Compliance: Different states have specific requirements for lien rights, and failure to send a preliminary notice can result in losing those rights. By sending the notice, you comply with state laws and protect your ability to collect payment.
4. Reduces Financial Risk: Knowing your role and the value of your services upfront reduces the risk of financial disputes. The preliminary notice acts as a formal introduction that outlines your expectations, minimizing the risk of short pay or no pay situations.

Key Requirements for Sending a Preliminary Notice

To ensure your preliminary notice is valid and effective, it must meet specific requirements:

• Timing: The notice must be sent within the timeframe specified by state laws, such as within 20 days of starting work or delivering materials in states like Arizona and California. Nevada has a 31 day notice window while Oregon is 8 business days and the state of Washington is 10 days.
• Recipients: Ensure the notice is sent to all relevant parties, including the property owner, general contractor, and any construction lenders involved.
• Mailing Method: Use certified mail with a return receipt requested to ensure proof of delivery. This method provides legal documentation that can be crucial if disputes arise. Arizona specifically requires first class mail with a certificate of mailing.
• Content: The notice should include your contact information, a description of the work or materials provided, and the estimated total value of the project.

The Process of Sending a Preliminary Notice

1. Gather Necessary Information: Compile details such as the names and addresses of the property owner, general contractor, and any lenders involved. Accurate information is vital to ensure the notice reaches the correct parties.
2. Prepare the Notice: Draft the preliminary notice with careful attention to detail, ensuring all state requirements are met.
3. Send the Notice: Mail the preliminary notice compliant with your state statutes, either certified mail, or first class mail with a certificate of mailing, ensuring it is sent within the legal timeframe. This provides a record of mailing and delivery.
4. Keep Records: Maintain copies of the notice and mailing receipts. These records are essential for verifying that the notice was sent correctly and on time as often, a proof of service affidavit will be requested after you record a mechanics lien.

Benefits of Using CNS for Your Preliminary Notices

At CNS, we offer comprehensive services to help manage your preliminary notices efficiently:

• In-Depth Research: We conduct thorough research to verify project details and ensure accuracy, reducing the risk of errors that could jeopardize your payment rights.
• Certified Mailing Services: Our in-house mailing team handles the entire mailing process, providing proof of service and maintaining meticulous records. CNS adheres to all state mailing requirements.
• Expert Support: Our team stays up-to-date on lien laws, offering guidance to help you navigate the process smoothly.

Conclusion

Sending a preliminary notice is a crucial step in protecting your financial interests. By ensuring you meet all the requirements and deadlines, you can safeguard your right to payment and avoid financial loss. For reliable and expert assistance, consider partnering with CNS to handle your preliminary notices effectively.

Contact us today to get your pre-lien started.

Prefer to call? You can reach us at 800-366-5660.

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.