How Indiana Preliminary Notices Preserve Your Mechanics Lien Rights | Handle

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How Indiana Preliminary Notices Preserve Your Mechanics Lien Rights

How Indiana Preliminary Notices Preserve Your Mechanics Lien Rights

September 16, 2020

Construction professionals are usually required to serve a preliminary notice on property owners to preserve their mechanics lien rights. Preliminary notices also allow property owners to know which parties are working on their projects.

Not all states require preliminary notices to be served. In Indiana, only certain construction participants need to serve preliminary notices before they can record a valid and enforceable mechanics lien.

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Send an Indiana Preliminary Notice in 60 seconds

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This guide discusses the two Indiana preliminary notices, the Notice to Owner of Mechanics Lien Rights and the Notice to Owner of Personal Liability. Rules and requirements are in place for serving these Indiana preliminary notices, and knowing these rules will help you serve them successfully.

Who must serve preliminary notices in Indiana?

Notice to Owner of Mechanics Lien Rights

The Notice to Owner of Mechanics Lien Rights must be served by parties who have no direct contractual relationship with the owner of a residential property. This preliminary notice requirement applies only to residential projects in Indiana.

Note that if the project is new construction of a residential property in a spec home or a subdivision, the notice must also be recorded in the county recorder’s office.

Notice to Owner of Personal Liability

The Notice to Owner of Personal Liability is not a must-serve for any party in Indiana. However, it is an optional stop notice that may be served by parties who do not have a direct contract with the owner.

The option to serve this Indiana preliminary notice applies to all types of projects, residential or otherwise.

When do you serve Indiana preliminary notices?

Notice to Owner of Mechanics Lien Rights

For parties working on the new construction of a property, the Indiana Notice to Owner of Mechanics Lien Rights must be served within 60 days of the date you start furnishing labor or materials to a project.

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For parties working on the repair, alteration, or improvement of an existing property, the deadline is within 30 days of the date you begin providing labor or materials to a project.

When do you serve an Indiana Notice to Owner of Mechanics Lien Rights

Notice to Owner of Personal Liability

This Indiana preliminary notice is not a requirement, therefore it has no deadline associated with it. Note that it is similar to a “stop notice,” so you generally serve it when you want an owner to withhold an amount from the general contractor until you receive your payment.

On whom do you serve Indiana preliminary notices?

Both the Notice to Mechanics Lien Rights and the Notice to Owner of Personal Liability are served on the property owner via certified mail with return receipt requested.

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

You lose your lien rights if you do not serve the Indiana Notice to Mechanics Lien Right on time.
On the other hand, failing to serve the Notice to Owner of Personal Liability has no effect on your right to file a mechanics lien as it is an optional preliminary notice in Indiana.

How to file Indiana preliminary notices

How to file an Indiana preliminary notice

1. Prepare the preliminary notice form

There are no statutorily required templates for either of the two preliminary notice forms, but they both must contain the following general information:

  • the exact or estimated contract amount
  • the dates the services were first and last furnished
  • a description of the services furnished
  • the name and address of the owner
  • the name and address of the party who hired you
  • your name and address

Note that for the Notice to Owner of Personal Liability, you should also include the amount that you are still awaiting from your client.

2. Deliver the Notice to Owner of Mechanics Lien Rights to the property owner

Both the Notice to Owner of Mechanics Lien Rights and the Notice to Owner of Personal Liability must be served via certified mail with return receipt requested. Remember that the Notice to Owner of Mechanics Lien Rights must be served within the applicable deadlines:

  • For parties working on new residential construction, serve the preliminary notice within 60 days of your first day of work
  • For parties working on repairs and improvement, serve the preliminary notice within 30 days of your first day of work

Keep the return receipt for your records. The Indiana preliminary notices are considered sent on the day of mailing.

3. File the preliminary notice in the county recorder’s office if required

For parties working on new residential constructions in a spec home or a subdivision, you are also required to file your Notice to Owner of Mechanics Lien Rights in the county recorder’s office. Even if you served the preliminary notice on the owner, it will be invalid unless you also file the Notice to Owner of Mechanics Lien Rights in the county recorder’s office.

This additional step does not apply to all other parties.

Best practices for serving an Indiana preliminary notice

1. Serve the Notice of Mechanics Lien Rights as early as possible

You are not allowed to file late preliminary notices in Indiana. If you fail to serve (and file) the Notice to Owner of Mechanics Lien Rights within the applicable deadline, you will lose your lien rights over the project. You do not want to lose the right to file a mechanics lien for something that could have been easily avoided, so be sure to record the Indiana preliminary notice as early as you can.

2. Keep your mailing return receipts

Indiana preliminary notices are served via certified mail with return receipt requested. Be sure to keep the mailing return receipts so you have proof that you complied with the state’s preliminary notice requirements. Even if the owner did not accept the document, having the return receipt as proof may be enough to show that you have done your part as required by the law.

3. Record an Indiana mechanics lien if payment issues come up

It is very important to understand that in Indiana, as in all states, a preliminary notice is not a mechanics lien. If payment disputes come up, you are strongly encouraged to file a mechanics lien to recover your payment. Filing an Indiana mechanics lien comes with its own rules and regulations, so also be sure to familiarize yourself with those requirements.

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