The process of preserving your lien rights typically starts when you send a preliminary notice to the property owner. However, not all states are notice states. There are some that do not impose preliminary notice requirements on any potential mechanics lien claimants.
Delaware is one of those states. But even though Delaware does not require construction participants to serve a preliminary notice on the property owner, it is still a good idea to notify the owner about your participation in their construction project.
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This guide details the reasons why you must serve a Delaware preliminary notice even if you are not required by law to do so.
- Who must serve a preliminary notice in Delaware?
- Why serve a preliminary notice in Delaware?
- How to serve a Delaware preliminary notice
- Best practices when serving a Delaware preliminary notice
Who must serve a preliminary notice in Delaware?
As mentioned, no construction participant is required to serve a preliminary notice in Delaware. General contractors, subcontractors, and material suppliers — regardless of their contractual relationship with the property owner — are not obligated to deliver a Delaware preliminary notice in order to preserve their lien rights.
Why serve a preliminary notice in Delaware?
Serving a preliminary notice has many benefits, including the following:
1. It opens communication lines between you and higher-tier parties
Payment disputes and delays sometimes crop up because of miscommunication. Serving a preliminary notice breaks the communication barrier between you and the owner or any other top-tier stakeholder.
2. It can help you get paid faster
In larger projects, owners can sometimes lose track of which contractors and subcontractors are working on their property. When you serve a preliminary notice, you are able let the property owner know that you are part of their project. Consequently, they are more likely to ensure that you receive your payment to prevent you from filing a mechanics lien.
3. It informs the property owner that you are aware of your lien rights
There is a misconception that serving a preliminary notice is a threatening act against the property owner. This is not true, because when you serve a preliminary notice, you are simply telling the property owner that you are a diligent businessperson aware of your legal rights to recover your payment. Serving a mechanics lien even helps you appear more professional among top-tier parties.
How to serve a Delaware preliminary notice
1. Prepare the Delaware preliminary notice form
Because Delaware does not have strict preliminary notice requirements, there is no statutory preliminary template for a Delaware preliminary notice. In general, however, preliminary notices must contain the following information:
- Your name and address
- The name and address of the property owner
- The name and address of the general contractor
- The name and address of the party who hired you if different from the owner or the general contractor
- A brief description of the property location that is sufficient for identification
- A brief description of the services that you provided or will provide to the project
- A statement saying that you are ready to exercise your lien rights should you not get paid for the work that you are about to furnish to the project
2. Deliver the Delaware preliminary notice form to the property owner
When your Delaware preliminary notice form is all set up, the next step is to deliver it to the property owner. There are no rules on how you must do it, but generally, you can serve your notice either through personal delivery or through certified mail with return receipt requested.
It is always a good idea to track your lien-related documents, so try to secure a return receipt or a signed acknowledgment of receipt form from the property owner.
There is also no deadline as to when you must serve a preliminary notice in Delaware. It is best practice to serve a preliminary notice on your first day of work, or at least within the first week after you begin furnishing services to the project. This way, the property owner will know right away that you are part of their project.
Best practices when serving a Delaware preliminary notice
1. Serve a Delaware preliminary notice even if it’s not required to do so
Delaware does not obligate you to serve a preliminary notice, but the benefits of doing so outweigh the simple effort of preparing a preliminary notice form. Not only are you opening communication lines with the property owner, but you are also able to gather relevant information when you begin to prepare a Delaware preliminary notice. Knowing the names and addresses of higher-tier parties can help a great deal should payment issues come up and you need to file a Delaware mechanics lien.
2. Serve the Delaware preliminary notice within your first week of working on a project
It is generally a good idea to serve a preliminary notice right away, preferably on your first day of work. Informing the property owner about your participation in their project must be done as soon as possible, not when it is too late and payment disputes and delays have already arisen.
3. Do not forget to file a Delaware mechanics lien if payment disputes occur
A preliminary notice is not a mechanics lien, so when payment disputes come up, make sure to make a Delaware mechanics lien claim. Filing a mechanics lien is still the best way to recover payment in case your client goes delinquent — you are highly encouraged to familiarize yourself with when and how to maximize your lien rights by recording a Delaware mechanics lien.