Payment Issues in Construction: How to Protect Your Right to Get Paid

Getting paid for your work in the construction industry isn’t always straightforward. Delayed payments, short payments, or even no payment at all are unfortunately common. These issues can cause serious problems for contractors, subcontractors, and suppliers trying to maintain steady cash flow.

Fortunately, there are legal tools available to help protect your right to get paid. One of the most effective tools is the mechanics lien, supported by the preliminary notice, which acts as a crucial first step in preserving your lien rights. In this article, we’ll walk through the importance of these protections and how you can use them to secure payment on every project.

What is a Mechanics Lien?

A mechanics lien is a legal claim against a property for unpaid labor, materials, or services provided during a construction project. Filing a lien places pressure on the property owner, general contractor, and lender, as it can prevent the property from being sold or refinanced until the issue is resolved. While it’s often used as a last resort, a mechanics lien is one of the most powerful tools for recovering payment in the construction industry.

However, to file a valid lien, you must meet strict legal requirements. In many states, that process begins with sending a preliminary notice.

What is a Preliminary Notice?

A preliminary notice, sometimes called a pre-lien, 20-day notice, or preliminary lien notice, is a document that informs the property owner, general contractor, and any construction lenders of your involvement in the project. It does not create a lien but is often required by law in order to preserve your right to file one if you are not paid.

Failing to send a preliminary notice could result in the loss of your lien rights entirely. It’s critical to understand your state’s requirements and make sure the notice is sent correctly.

Why is Sending a Preliminary Notice Important?

Sending a preliminary notice is crucial for several reasons:

  • Protects Your Right to Payment: Preliminary notices are often required by law to maintain your ability to file a mechanics lien. Without one, you may have no legal recourse if you aren’t paid.
  • Improves Communication and Transparency: A preliminary notice informs all parties of your role in the project, helping prevent confusion and payment disputes down the line.
  • Helps Reduce Financial Risk: With clear documentation of your participation and expectations, a preliminary notice can help protect you in the event of delayed or disputed payments.
  • Builds Trust and Professionalism: Sending a prelim shows that your business follows industry best practices and understands the importance of protecting everyone involved.

Key Requirements for Sending a Preliminary Notice

Preliminary notice rules vary from state to state. Here are the most important factors to consider:

  • Timing:
    • California and Arizona: Must be sent within 20 days of first labor or material delivery
    • Nevada: Within 31 days
    • Oregon: Within 8 working days
    • Washington: Within 10 days for new residential work
    • Florida: Within 45 days
    • New Mexico: Within 60 working days
  • It’s important to send your notice within the required timeframe for your state. CNS does not track project milestones or deadlines, so be sure to calculate and send your notice on time.
  • Recipients: Send the notice to the property owner, general contractor, and any construction lenders. Even general contractors must send preliminary notices in certain cases, such as when working for a tenant or when a lender is involved.
  • Mailing Method:
    • Arizona: Requires first-class mail with a certificate of mailing
    • California: Requires certified, registered, express, or overnight delivery
    • Always keep proof of mailing. This documentation may be needed if a lien is later recorded.
  • Content: Include your business information, a description of the labor or materials provided, and an estimated total value for your work.

The Process of Sending a Preliminary Notice

Sending a valid preliminary notice involves several steps:

  • Gather Project Details: You’ll need accurate names and addresses for the property owner, general contractor, and lender. Mistakes here can cause your notice to be invalid.
  • Verify Addresses: CNS uses USPS address verification tools to confirm that your notice is going to the right place. Notices sent to the wrong address may never be received, putting your lien rights at risk.
  • Prepare the Notice: Each state has its own rules. CNS prepares notices that comply with your state’s specific requirements to help ensure validity.
  • Send the Notice: It is your responsibility to send the preliminary notice before your state’s deadline. CNS handles the mailing process using certified or first-class mail, depending on the legal requirements in your state.
  • Maintain Records: Keep copies of the notice, mailing receipt, and certificate of mailing or proof of service. If a mechanics lien is later needed, this documentation may be requested.

Benefits of Using CNS to Protect Your Right to Payment

CNS offers services designed to reduce risk and help ensure your preliminary notices are sent correctly:

  • Project Party Verification: We conduct thorough research to identify the required parties, such as owners, GCs, and lenders, even if you don’t have full project details.
  • Address Verification: CNS confirms delivery addresses using USPS, and other tools to reduce the chance of lost or misdirected notices.
  • In-House Mailing: Our internal mailing team handles the entire delivery process, ensuring accuracy and maintaining full records in case they are needed later.
  • Pay-as-You-Go Service: With CNS, you only pay for what you need, with no long-term contracts or hidden fees.
  • Support Without Overreach: While CNS does not provide legal advice or track deadlines based on project milestones, we can refer you to qualified attorneys and ensure your notices are properly prepared and mailed.

Conclusion

Payment issues in construction can be costly, but protecting yourself doesn’t have to be complicated. Sending a preliminary notice is the first and most important step to preserving your lien rights. By ensuring that your notice is timely, complete, and properly delivered, you help secure your right to get paid for your work.

At CNS, we help make that process easier by verifying project participants, confirming addresses, and handling delivery — all without locking you into long-term contracts. While it’s your responsibility to know your deadlines, CNS ensures that your notices are accurate and complete.

Contact us today to get a preliminary notice 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.