Iowa Preliminary Notices: Who Must While and When? | Handle

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Iowa Preliminary Notices: Who Must While and When?

Iowa Preliminary Notices: Who Must While and When?

September 23, 2020

Serving a valid preliminary notice is usually a requirement for filing a mechanics lien in a payment dispute in construction. A preliminary notice is a document that preserves your lien rights, so failing to serve one can cost you your legal right to record a mechanics lien against a property.

In Iowa, there are two preliminary notices to keep in mind: the Notice to Owner and the Notice to Prime Contractor. While not all construction participants are required to file either of these preliminary notices, doing so is still a good practice to open communication lines with higher-tier parties in a construction project.

This guide will discuss everything you need to know about the two Iowa preliminary notices, including the best practices to keep in mind.

Who must file a preliminary notice in Iowa?

Notice to Owner

The Iowa Notice to Owner must be filed by general contractors, subcontractors, and material suppliers working on residential projects.

Notice to Prime Contractor

The Iowa Notice to Prime Contractor must be filed by parties who have no direct contract with the owner or the general contractor on non-residential projects.

The Notice to Prime Contractor must also be filed by those working on public projects who have no direct contract with the general contractor.

When do you serve an Iowa preliminary notice?

Notice to Owner

General contractors on residential projects must file the Notice to Owner within 10 days of the date they begin furnishing labor or materials to a project.

Subcontractors and suppliers on residential projects must file the Notice to Owner before their payment is disbursed by the owner to the general contractor. Filing is generally done as early as when you begin working on a project.

When do you serve an Iowa preliminary notice-owner

Notice to Prime Contractor

Parties who are working on non-residential projects and are required to file a Notice to Prime Contractor must do so within 30 days of the date when you start furnishing labor or materials to a project.

Parties who are working on public projects and who are required to file a Notice to Prime Contractor must do so within 30 days after the completion of your work.

When do you serve an Iowa preliminary notice-Prime Contractor

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

Your lien rights will be affected if you fail to serve the required Iowa preliminary notice. It’s either you get disallowed to file a mechanics lien against the property in question or the extent of your potential mechanics lien claim will be reduced if you file the applicable preliminary notice too late.

How to file an Iowa preliminary notice

How to file an Iowa preliminary notice

1. Gather the required information

Notice to Owner

The information required for a Notice to Owner depends on your role in a project. For general contractors on residential projects, your Iowa Notice to Owner must contain a list of names and addresses of the subcontractors and suppliers working on the project, as well as a statement saying that these parties may potentially file a mechanics lien. Usually, this list is already incorporated in the contract, but Iowa requires that this list be updated over the course of a project if new subcontractors and suppliers are hired.

For other parties required to serve a Notice to Owner (e.g. subcontractors, material suppliers), your Notice to Owner must have the following information:

  • The name of the owner
  • The mechanics’ notice and lien registry (MNLR) number
  • Your name, address, and telephone number
  • The name and address of the person who contracted with you
  • The name of the general contractor or owner-builder under whom you are performing or will perform the work
  • The address of the property or a description of the location of the property if the property cannot be reasonably identified by an address
  • The legal description that adequately describes the property to be charged with the lien
  • The date the material or materials were first furnished or the labor was first performed
  • The tax parcel identification number
  • Any other information required by the administrator pursuant to rule

Note that the MNLR number of the project may be found in the Notice of Commencement that should be filed by the general contractor. If there is no Notice of Commencement filed yet, you may need to file it yourself as a subcontractor.

Notice to Prime Contractor

For parties required to file a Notice to Prime Contractor, you need the following details:

  • Your name, mailing address, and telephone number
  • The name of the subcontractor to whom the labor or materials were furnished

You may also add a statement saying that you may enforce your lien rights in case proper payments are not made.

2. File or serve the preliminary notice, as appropriate

Once you have all the required details, you may then file and serve your preliminary notice. The methods for actually notifying the appropriate parties vary depending on the project type and on your role in the project.

Notice to Owner

General contractors usually incorporate the list of subs and suppliers in their contract. If this is not done, you have 10 days after your first day of work to serve a written document on the property owner. The document contains the list that you gathered in Step 1.

Subcontractors and material suppliers, on the other hand, may file their preliminary notice via the MNLR. The MNLR is an online registry that makes the process for filing a preliminary notice, among other documents, easy.

Remember that filing the Notice to Owner for subcontractors and suppliers must be done before full payment is released by the owner to the party who hired you. You should file the preliminary notice as early as possible. Filing late will limit the amount that you can recover via a mechanics lien.

Notice to Prime Contractor

The Notice to Prime Contractor is a written document that is served on the prime contractor and also the property owner. Service may be done via certified mail with return receipt requested. Make sure to keep copies of the mailing receipts—you may need to show proof of service once you go on to file an actual mechanics lien.

Best practices for serving an Iowa preliminary notice

1. Ensure that you serve the right preliminary notice

The rules as to what preliminary notice you must serve may seem complicated, but you have just to take into account your role in the project as well as the type of project that you are working on. Take note also of the appropriate service method for your preliminary notice – keep in mind that some preliminary notices in Iowa are delivered as written documents, while some are filed through the MNLR.

2. Serve the Notice to Owner early

Subcontractors and suppliers are particularly encouraged to serve their preliminary notices early. Serving or filing late may affect the amount that you can recover if payment disputes arise. Remember that the extent of your potential lien claim depends on the amount that is still owed by the owner to the general contractor. Make sure to file your preliminary notice before your portion of the payment is disbursed to the GC.

3. Keep a recorded proof that you served the preliminary notice

When you file a mechanics lien, you may have to prove that you have adhered to the preliminary notice requirements that apply to you. Doing so will be easier if you have documentary evidence to back your claim. When filing a preliminary notice in Iowa, be sure to keep copies of your mailing receipts and note down all details from MNLR.

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