Send Arkansas Preliminary Notices: How to Secure Your Lien Rights | Handle

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Send Arkansas Preliminary Notices: How to Secure Your Lien Rights

Send Arkansas Preliminary Notices: How to Secure Your Lien Rights

September 28, 2020

Preliminary notices play an important role in ensuring that you get paid for your construction work. In most states, potential lien claimants must first serve the correct preliminary notices before they are able to exercise their lien rights.

Arkansas is one of these states. Before you are able to record a valid Arkansas mechanics lien, you have to serve either of two preliminary notices: the Pre-Construction Notice to Owner or the Notice to Owner and Contractor.

In this guide, we answer all the questions you might have on serving these Arkansas preliminary notices. We also list the best practices that you should take note of to ensure that you successfully fulfill the preliminary notice requirements in Arkansas.

Who must serve a preliminary notice in Arkansas?

The parties required to serve an Arkansas preliminary notice vary depending on the type of the project and the work that they do.

Arkansas Pre-Construction Notice to Owner

General contractors working on residential projects are required to serve an Arkansas Pre-Construction Notice to Owner. Once they serve this notice, the lien rights of their subcontractors and material suppliers are subsequently protected.

However, note that any potential claimant may serve this pre-construction preliminary notice in order to also protect their lien rights. If you are a subcontractor or a material supplier, serve the pre-construction notice to owner to ensure that your lien rights are preserved in case the general contractor fails to do their part.

Arkansas Notice to Owner and Contractor

Potential lien claimants on commercial projects are required to serve a Notice to Owner and Contractor. Parties such as subcontractors, material suppliers, and laborers should serve this Arkansas preliminary notice to preserve their lien rights.

Since this preliminary notice is served on owners and general contractors on commercial projects, general contractors themselves are not obligated to serve it.

When do you serve an Arkansas preliminary notice?

Pre-Construction Notice to Owner

The Pre-Construction Notice to Owner in Arkansas must be served prior to commencing work on a residential project. It may be incorporated in a contract as long as it is conspicuous and written in boldface type.

When do you serve an Arkansas Pre-Construction Notice to Owner

Notice to Owner and Contractor

The Notice to Owner and Contractor must be served no later than 75 days from the time the labor or materials were first furnished. This 75-day deadline is strictly enforced in Arizona, so be sure that you serve this preliminary notice on time.

When do you serve an Arkansas Notice to Owner and Contractor

What happens if you fail to serve an Arkansas preliminary notice?

If a general contractor for a residential project fails to serve the Pre-Construction Notice to Owner, they will lose their right to file a mechanics lien against that specific project. In effect, subcontractors and material suppliers will also lose their lien rights unless at least one of them has sent a signed Notice to Owner form to the property owner.

If you are required to serve a Notice to Owner and Contractor and you do not do so on time, you will lose your lien rights too.

How to serve an Arkansas preliminary notice

How to serve an Arkansas preliminary notice

1. Prepare the Arkansas preliminary notice form

The Arkansas Code includes specific preliminary notice forms that every potential lien claimant must use. These forms are available under A.C.A. § 18-44-115.

Pre-Construction Notice to Owner

For your pre-construction Notice to Owner, all you need is to copy and fill out the following template:

IMPORTANT NOTICE TO OWNER

I UNDERSTAND THAT EACH CONTRACTOR, SUBCONTRACTOR, LABORER, SUPPLIER, ARCHITECT, ENGINEER, SURVEYOR, APPRAISER, LANDSCAPER, ABSTRACTOR, OR TITLE INSURANCE AGENT SUPPLYING LABOR, SERVICES, MATERIAL, OR FIXTURES IS ENTITLED TO A LIEN AGAINST THE PROPERTY IF NOT PAID IN FULL FOR THE LABOR, SERVICES, MATERIALS, OR FIXTURES USED TO IMPROVE, CONSTRUCT, OR INSURE OR EXAMINE TITLE TO THE PROPERTY EVEN THOUGH THE FULL CONTRACT PRICE MAY HAVE BEEN PAID TO THE CONTRACTOR. I REALIZE THAT THIS LIEN CAN BE ENFORCED BY THE SALE OF THE PROPERTY IF NECESSARY. I AM ALSO AWARE THAT PAYMENT MAY BE WITHHELD TO THE CONTRACTOR IN THE AMOUNT OF THE COST OF ANY SERVICES, FIXTURES, MATERIALS, OR LABOR NOT PAID FOR. I KNOW THAT IT IS ADVISABLE TO, AND I MAY, REQUIRE THE CONTRACTOR TO FURNISH TO ME A TRUE AND CORRECT FULL LIST OF ALL SUPPLIERS AND SERVICE PROVIDERS UNDER THE CONTRACT, AND I MAY CHECK WITH THEM TO DETERMINE IF ALL MATERIALS, LABOR, FIXTURES, AND SERVICES FURNISHED FOR THE PROPERTY HAVE BEEN PAID FOR. I MAY ALSO REQUIRE THE CONTRACTOR TO PRESENT LIEN WAIVERS BY ALL SUPPLIERS AND SERVICE PROVIDERS, STATING THAT THEY HAVE BEEN PAID IN FULL FOR SUPPLIES AND SERVICES PROVIDED UNDER THE CONTRACT, BEFORE I PAY THE CONTRACTOR IN FULL. IF A SUPPLIER OR OTHER SERVICE PROVIDER HAS NOT BEEN PAID, I MAY PAY THE SUPPLIER OR OTHER SERVICE PROVIDER AND CONTRACTOR WITH A CHECK MADE PAYABLE TO THEM JOINTLY.

SIGNED: ____________________
                               ADDRESS OF PROPERTY ____________________

DATE: ____________________

I HEREBY CERTIFY THAT THE SIGNATURE ABOVE IS THAT OF THE OWNER, REGISTERED AGENT OF THE OWNER, OR AUTHORIZED AGENT OF THE OWNER OF THE PROPERTY AT THE ADDRESS SET OUT ABOVE.
____________________
CONTRACTOR

Be sure to type the important statements in boldface type and in capital letters. You may also download the template directly from A.C.A. § 18-44-115(a)(7).

Notice to Owner and Contractor

The Arkansas Notice to Owner and Contractor must have the following details:

  • A general description of the labor, service, or materials furnished, and the amount due and unpaid;
  • The name and address of the person furnishing the labor, service, or materials;
  • The name of the person contracted with for the purchase of the labor, service, or materials;
  • A description of the job site sufficient for identification; and
  • The following statement set out in boldface type and capital letters:

NOTICE TO PROPERTY OWNER

IF BILLS FOR LABOR, SERVICES, OR MATERIALS USED TO CONSTRUCT OR PROVIDE SERVICES FOR AN IMPROVEMENT TO REAL ESTATE ARE
NOT PAID IN FULL, A CONSTRUCTION LIEN MAY BE PLACED AGAINST
THE PROPERTY. THIS COULD RESULT IN THE LOSS, THROUGH FORECLOSURE PROCEEDINGS, OF ALL OR PART OF YOUR REAL ESTATE BEING IMPROVED. THIS MAY OCCUR EVEN THOUGH YOU HAVE PAID YOUR CONTRACTOR IN FULL. YOU MAY WISH TO PROTECT YOURSELF AGAINST THIS CONSEQUENCE BY PAYING THE ABOVE NAMED PROVIDER OF LABOR, SERVICES, OR MATERIALS DIRECTLY, OR MAKING YOUR CHECK PAYABLE TO THE ABOVE NAMED PROVIDER AND CONTRACTOR JOINTLY.”

2. Serve the preliminary notice on the appropriate parties

After preparing and signing the Arkansas preliminary notice forms, you should then serve them on the appropriate recipients.

The Pre-Construction Notice to Owner (titled “Important Notice to Owner”) is served on the property owner, while the Notice to Owner and Contractor (titled “Notice to Property Owner”) must be served on both the owner and the general contractor.

The Pre-Construction Notice to Owner may be served via personal delivery or certified mail with return receipt requested. If served in person, you should get the signature of the property owner or the owner’s agent to acknowledge receipt of the notice.

The Notice to Owner and Contractor may also be served via personal delivery or certified mail with return receipt requested, as well as other third party methods outlined under A.C.A. § 18-44-116.

Also, take note of the deadlines for serving the preliminary notices:

  • The deadline for serving the Pre-Construction Notice to Owner is prior to commencing work.
  • The period for serving the Notice to Owner and Contractor is during the 75 days from the time you begin furnishing materials or labor to a project.

Note that late preliminary notices are not accepted in Arkansas. Failing to submit a properly prepared preliminary notice template on time will extinguish your lien rights and prohibit you from recording a mechanics lien against a project.

Best practices for serving an Arkansas preliminary notice

1. Stick to the statutory preliminary notice templates

Make sure you’re using a form that includes required text that can be found in Arkansas Code. It is best practice to stick to these preliminary notice templates found in the statutes, as is in our form when you file through Handle. When you prepare your preliminary notice form, be sure that it has all the required statements and that they are all written in boldface type and in capital letters.

2. Serve the Arkansas preliminary notice as early as you can

The Pre-Construction Notice to Owner must be served before you even begin furnishing services to a project, while the Notice to Owner and Contractor must be served within your first 75 days of actual, physical work. Be sure to take note of these deadlines. It is also best practice to serve the preliminary notice as early as you can to avoid any issues in compliance with Arkansas’ preliminary notice rules.

3. Record a mechanics lien if payment disputes come up

Some construction participants often make the wrong assumption that a preliminary notice is the same as a mechanics lien. They are not the same. If payment disputes arise, your best recourse to recover your full payment is to record an actual Arkansas mechanics lien. You are strongly encouraged to familiarize yourself with the rules and regulations associated with filing a valid mechanics lien in Arkansas.

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