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Preliminary Notice FAQ
A Maryland preliminary notice is a letter sent by a contractor or supplier to the property owner at the start of a construction project. In many states, a preliminary notice is required to be sent in order to protect the right to file a mechanics lien.
In Maryland, a preliminary notice is referred to as Notice of Intent to Lien. The Notice of Intent to Lien is usually a different and separate type of pre-lien notice in other states, but in Maryland, it works as a preliminary notice that secures lien rights.
If you did not contract directly with the property owner, you are required to send a preliminary notice, otherwise known as Notice of Intent to Lien in Maryland.
If you do not send a Notice of Intent to Lien in Maryland, you cannot file a valid mechanics lien.
Intent To File FAQ
A Maryland notice of intent to lien is sent to warn the property owner that you will be filing a mechanics lien if you do not receive your payment. In Maryland, the notice of intent to lien is actually the preliminary notice as known in other states. Like most preliminary notices in other states, a Maryland notice of intent to lien is required to preserve lien rights.
Parties who have no direct contractual relationship with the property owner are required to serve a Maryland notice of intent to lien. These parties include subcontractors and material suppliers. [i]
The Maryland notice of intent to lien must be served within 120 days of your last day of work. Your last day of work corresponds to the final day when you furnished labor or materials to a project.
In single-family residential projects, the notice of intent to lien must be served within the same 120-day period but before the property owner releases the full payment to the general contractor.
If you don’t send a Maryland notice of intent to lien when required, you lose your lien rights.
Mechanics Lien FAQ
A Maryland mechanics lien is an effective tool that helps make sure you will be paid for the construction materials and/or labor you supplied. It is a legal claim that can effectively recover payment for contractors and suppliers.
This means that if you file a valid mechanics lien in Maryland and you do not get paid for your work, you have the right to enforce the lien through a lawsuit. This enforcement action can either prompt the client to settle or force the sale of the property. The proceeds of the sale will be used to settle your unpaid bill.
If you successfully file a Maryland mechanics lien, you have an interest in the improved property. When a mechanics lien is filed on the property you worked on, the property becomes collateral for uncollected payments.
According to Maryland Code 9-102, any party who performs construction work on a project has lien rights. [ii] For parties working on a repair of an existing property, such a repair must be worth at least 15% of the property’s value for the involved parties to have lien rights.
A mechanics lien in Maryland must be filed within 180 days of your last day of work, which is the day when you last furnished labor or materials to the project.
Note that filing a mechanics lien in Maryland must be established through a legal action made in the court in the same county where the project is located.
A Maryland mechanics lien is enforceable within 1 year after the filing day. A claimant must therefore enforce a mechanics lien within this period or the mechanics lien expires.
The Maryland mechanics lien must contain the following information [iii]:
- The name and address of the petitioner;
- The name and address of the owner;
- The nature or kind of work done or the kind and amount of materials furnished
- The time when the work was done or the materials furnished
- The name of the person for whom the work was done or to whom the materials were furnished
- The amount or sum claimed to be due, less any credit recognized by the petitioner
- A description of the land, including a statement whether part of the land is located in another county, and a description adequate to identify the building
- If the petitioner is a subcontractor, documents showing that the notice required preliminary notice was properly mailed or served upon the owner
Aside from the Maryland mechanics lien form, you also need an affidavit that states the facts of your claim.
Most construction parties do not need a license to have lien rights in Maryland. However, a corporation must be duly registered in the state before it can file a mechanics lien as a business.
According to Maryland Code 9-114, a contractor must give the property owner a signed release of lien at the time of settlement or payment. [iv]
The “pay-if-paid” clause is enforceable only if established in unambiguous language. The “pay-when-paid” clause is also enforceable.
[iii] Maryland Code § 9-105