The construction industry is notorious for payment disputes and delays so running a construction business means bearing the risk of never getting paid. Contractors and subcontractors must therefore give utmost priority to protecting their legal right to file a mechanics lien—and this process begins with serving the preliminary notice.
Sending a preliminary notice secures one’s right to file a mechanics lien in many states. In these states, sending a preliminary notice is a prerequisite before one can file a valid mechanics lien.
A preliminary notice is typically sent to a property owner and a general contractor to inform them about your participation in a project. It also lets them know that you are aware of your lien rights in case payment issues come up during the course of the project.
Unlike other pre-lien notices, a preliminary notice is sent early in the project, usually within the first 10 to 30 days after your first day of work.
The preliminary notice form is therefore prepared early on, and it usually contains basic information such as names and addresses of property owners, legal description of a property, general statement about the type of work being provided, and a reasonable amount of the work’s worth.
But how exactly do you serve the preliminary notice?
There are four major options on how to deliver preliminary notices: by personal delivery, by regular certified mail, by certified mail with return receipt, and online.
Keep in mind that you are dealing with a notice that could potentially be used in a legal dispute—having documented evidence that the notice was indeed sent and delivered is highly important in the eyes of the law. The proof of delivery may even spell the difference between protecting your lien rights or effectively voiding them.
Mechanics liens may be contested by a property owner or a general contractor on the basis of a technicality. This means that your lien may be declared invalid if you are unable to provide proof that you have duly complied with a state’s notice requirement.
Some states, however, do not have a hard-and-fast deadline when it comes to submitting a preliminary notice. California allows your to serve a notice late, but the coverage of your mechanics lien will only apply from the previous 20 days prior to your sending the notice.
Other states like Texas have stricter notice requirements. Failing to file a preliminary notice within the due date will automatically invalidate your right to file a mechanics lien in these states.
Delivering a preliminary notice by hand seems like the most convenient option, and this method is also likely allowable in many states like Texas, Montana, and Florida. However, just because personal delivery of notices can be accepted does not mean it is the best option.
It is difficult to produce a documented evidence of delivery when you hand your preliminary notice directly to the owner or the lender. One can craft a document and ask the receiving party to sign it as proof that the notice was received. Another way to go about it is to take photos to prove that the notice was personally delivered.
The validity of these proofs however may be questioned in court. It is still highly recommended to deliver preliminary notices—and other lien-related documents for that matter—in a way that is explicitly recognized in the lien laws of your state.
Regular Certified Mail
The lien laws in most states often consider a preliminary notice to be officially delivered right at the time of mailing. Delivering a preliminary notice by regular certified mail is therefore a more preferable option over sending the notice by hand.
Sending your notice via regular certified mailing also gives you the ability to track your document. A tracking number is given to each certified mail and you are able to receive delivery updates from the time the document was picked up in the post office until it gets delivered to the intended address.
The recipient of the notice will also be required to sign a confirmation of receipt. This signature however will not be sent back to the sender. Additional fees must be paid for you to have access to this record.
Certified Mail with Return Receipt Requested
In order to get your own copy of a proof of receipt, you may pay for a “Return Receipt Requested” service on top of the postage fees of a regular certified mail. When you pay for the return receipt service, a “green card” is attached to the parcel that contains your preliminary notice. This card will be signed by the recipient and will be mailed back to you.
Paying for the return receipt option gives you the same tracking advantages as regular certified mail. But while a regular certified mail would suffice in some states, there have been instances in which not having a return receipt resulted in a court decision that invalidated a subcontractor’s lien.
In California, the lien statutes explicitly require a return receipt or a similar proof of delivery (or attempted delivery) in order to prove that the preliminary notice has been served. This proof must also be officially provided by the United States Postal Service (USPS). Delivering the notice using certified mail with the “return receipt requested” service is therefore arguably the best option among the four if you want to do it manually.
Send Preliminary Notices online
Can you send a preliminary notice over the internet?
Yes. You can send it through us here at Handle.
Many companies fail to protect their lien rights because of errors in the way pre-liens are prepared and sent — misspelled or incorrect names for involved parties, wrong forms, or using a delivery method that invalidates the notice and voids their lien rights. Material suppliers, subcontractors, and contractors will benefit from using a service that ensures accuracy and validity of the notices they send to secure their right to lien.
Fortunately, you can skip the trip to the clerk’s office, the label printing, and the hours of research for the correct names and addresses by using Handle to send your preliminary notices online.
Since Handle takes care of the information lookup and the mailing, you’re able to file valid preliminary notices and keep the proof of delivery all online.
Other Key Things To Remember
Keeping tabs of all documented proofs of delivery is very important, and these proofs include not just the return receipt but also your regular USPS payment receipt and the tracking record for the parcel. If done online, the information is stored in your account and you can access them if you’ll need to enforce a mechanics lien later on.
Different states also have different lien statutes so it is advisable to err on the side of caution and go with the delivery option that guarantees accuracy and validity. Managing all the paperwork in the construction business can be a very daunting task but it has to be done to ensure that you protect your lien rights. Fortunately, there’s a way to do it all online.