Serving a preliminary notice is typically a mandatory requirement in any state before you can file a valid mechanics lien. A preliminary notice communicates to a property owner your intentions of filing a mechanics lien in case you do not get paid for your work, so it gives the owner a heads-up and lets them know of your involvement in a project.
New Hampshire is one of the states that require certain parties to serve a preliminary notice – also known as the Notice of Intent to Claim a Lien – before a valid mechanics lien may be recorded. On top of this, a recurring Written Accounting of your services must also be served on the property owner every 30 days.
This guide will explain the basic details that you must know when serving preliminary notices in New Hampshire.
- Parties required to serve preliminary notices in New Hampshire
- When to serve a preliminary notice in New Hampshire
- What happens if you fail to serve a preliminary notice in New Hampshire?
- How to serve New Hampshire preliminary notices
- Best practices when serving a New Hampshire preliminary notice
Parties required to serve preliminary notices in New Hampshire
All parties that do not have a direct contractual relationship with the property owner are required to serve a preliminary notice or a Notice of Intent to Claim a Lien in New Hampshire. This includes subcontractors, sub-subcontractors, and material suppliers who do not supply materials directly to the owners.
In addition, a Written Accounting of your services must be served on the property owner every 30 days. This written account generally includes an itemized list of your invoices in the previous 30 days for each month that you perform work on a project.
Serving this written accounting of your services is important because it requires a property owner to keep a sufficient amount of money that can cover unpaid invoices. Having a property owner save a sufficient of money will be helpful in the event that a payment dispute arises between you and the party who hired you.
When to serve a preliminary notice in New Hampshire
There is no strict deadline for serving a Notice of Intent to Claim a Lien in New Hampshire. The law allows you to serve the preliminary notice before your first day of furnishing labor or materials to a project, and it also lets you serve the notice after your first day of work.
Generally, it is best practice to serve the preliminary notice as early as possible. Since the notice is a mandatory requirement, it is best to get this requirement out of the way as promptly as you can.
You must also not forget to send the written accounting to the property owner every 30 days. Because this is a recurring requirement, make sure that you have an itemized list of your invoices ready to be served on the property owner for each month that you work on their project.
What happens if you fail to serve a preliminary notice in New Hampshire?
Notice of Intent to Claim a Lien
Failing to serve a preliminary notice altogether disqualifies you from filing a mechanics lien. If you do not have a direct contract with the property owner, you need to serve this notice if you want to serve an enforceable mechanics lien.
The tricky part, however, lies in the timeliness of serving your preliminary notice. Since there is no hard and fast deadline, you may serve the notice anytime you want before you record your mechanics lien. However, be aware that the amount that you can recover through a mechanics lien claim depends on when you serve the notice.
In New Hampshire, a mechanics lien is only effective for the amount of payment that the property owner is yet to release to the general contractor(s) prior to receiving the preliminary notice.
Say, for example, that an entire project is worth $100,000 and the property owner has already disbursed $30,000 to the general contractor. If you serve your preliminary notice after that $30,000 has been released, you may only recover payment from the remaining $70,000 that the owner is yet to disburse.
Keep in mind that even if the owner has paid the general contractor $30,000, a payment dispute or issue may arise and you may not receive the full compensation that you worked hard to earn.
You are therefore encouraged to serve the preliminary notice as early as possible to avoid limiting the pool of money that you may recover payment from.
Monthly Written Accounting of Services
Failing to serve the monthly written accounting of your services also does not have a direct effect on your lien rights.
However, the purpose of serving such monthly accounting is to require the property owner to retain a certain amount of money that can cover your payment if a payment dispute comes up. It is therefore in your best interest to religiously serve a monthly written accounting of your services as it increases your chances of getting paid.
How to serve New Hampshire preliminary notices
1. Prepare your New Hampshire preliminary notice forms
New Hampshire state laws do not have a prescribed list of information that must be included in your Notice of Intent to Claim a Lien. In general, the following details are typically included in any preliminary notice:
- Your name and address
- The name and address of the property owner
- The name and address of the party that hired you
- A description of the property location
- The type of service that you have provided or will provide to the project
- A statement that informs the property owner your willingness to record a mechanics lien if you do not get paid for your work
2. Serve the New Hampshire preliminary notices
There are no specific deadlines or service methods that you must follow in order to serve a preliminary notice properly. Sending a preliminary notice before or within the first few days of your first day of work is advised.
Serving a preliminary notice either via certified mail with return receipt requested or personal delivery is okay, as long as you keep all the documentation that may be necessary to prove your compliance with the notice requirement.
The New Hampshire Notice of Intent to Claim a Lien must be served on the property owner(s).
Serving the Notice of Intent to Claim a Lien must be followed by sending a written account of all the work that you have rendered on a project every 30 days. This written account may be an itemized list of your invoices, and it must clearly state the balance due.
This step is necessary because the law requires property owners to keep a sufficient amount that matches the balance that is due to every party working on their projects. If the party who directly hired you does not pay you for your work, the property owner becomes liable to step in and pay up.
Best practices when serving a New Hampshire preliminary notice
1. Serve the preliminary notices early
The New Hampshire Notice of Intent to Claim a Lien may be served before your first day of work – if possible, have your preliminary notice ready before or at least within the first few days of when you start working on a project.
Serving the preliminary notice promptly allows you to comply with the notice requirement without limiting the pool of payment that you may recover via a mechanics lien.
2. Keep documented proof of service
New Hampshire statutes do not have a prescribed method for serving the preliminary notice. Serving it via registered or certified mail with return receipt requested is generally considered an effective service method.
Whatever method you choose, just make sure that you have all the necessary receipts and documents to prove that you have duly complied with the requirement, in case your compliance gets questioned.
3. Organize your invoices and accounts
In New Hampshire, you are required to send a written account of your work as well as the balance due every 30 days. Doing this will be easy if your books are organized and your invoices are itemized properly.
Keeping your records organized will allow you to comply with New Hampshire’s preliminary notice requirements easily. Make sure that your invoices have accurate dates and amounts to avoid any issues.