A preliminary notice is one of the important forms that you must serve, regardless if it is required or not. Sending a preliminary notice to a property owner and other higher-tier parties informs them of your involvement in a project, and it lets them know that you are aware of your right to file a mechanics lien against their property.
In Alaska, a preliminary notice – commonly known as Notice of Right to Lien – is not a strict requirement. This means that you do not lose your lien rights even if you fail to serve this notice. However, serving this notice has many advantages that can help you make a stronger mechanics lien claim down the road.
This guide will walk you through everything you need to know about serving the Alaska preliminary notice, from its benefits and advantages all the way to how you prepare your Notice of Right to Lien form.
What is a Notice of Right to Lien in Alaska?
A Notice of Right to Lien is Alaska’s preliminary notice, a document that informs a property owner that you are involved in the construction or improvement of their property. Consequently, it also lets them know that you are expecting to get paid for your work and that if payment issues arise, you are willing to exercise your mechanics lien rights.
As mentioned earlier, a Notice of Right to Lien is not a mandatory notice in Alaska. You are not obligated by statutory laws to serve this notice. You must keep in mind, however, that Alaska’s lien statutes will generally favor property owners if you do not serve the optional Notice of Right to Lien.
Benefits of serving a Notice of Right to Lien in Alaska
1. It is documented proof that the property owners are aware of their obligation to get you paid.
One of the primary objectives of serving any type of preliminary notice is to inform property owners which parties may attach a mechanics lien to their property if these parties do not get paid. As mentioned, a preliminary notice is not mandatory in Alaska, which means that if a payment dispute crops up, a property owner could easily claim that they simply did not know you were part of their project.
Serving a valid Alaska Notice of Right to Lien solves this problem. When you serve a Notice of Right to Lien, the courts will automatically be on your side. If a property owner wants to make such a claim, they will have to provide evidence that will counter the validation of your Notice of Right to Lien.
2. It ensures that you are notified that a Notice of Completion was filed by the property owner.
The Notice of Completion is crucial when filing an Alaskan mechanics lien. The typical deadline for recording a mechanics lien in Alaska is within 120 days of your last day of work, but if a Notice of Completion has been filed, this deadline gets shortened to a mere 15 days after the notice’s recordation date.
The catch, however, is that property owners are not required to notify all construction parties that a Notice of Completion has been filed. Lien claimants can miss their respective filing deadlines simply because they did not know that a Notice of Completion has been recorded.
Property owners are required to notify only the construction parties who have served a Notice of Right to Lien early in a project. When you serve the Notice of Right to Lien, you will know if the deadline has been shortened to 15 days, giving you little chance to miss your deadline.
If the property owners fail to notify you even if you sent them a valid Notice of Right to Lien, your deadline will not get cut short and will remain within the 120-day period. This is another very important perk of doing the extra work by serving a Notice of Right to Lien.
When to serve the Alaska Notice of Right to Lien
A Notice of Right to Lien must be served before you begin working on a project. When you know that you have secured a job on a project, you must start preparing your Notice of Right to Lien form and serve it before your first day of work.
Serving your preliminary notice this early allows you to have the benefits that were mentioned above.
What happens if you don’t serve the Notice of Right to Lien prior to working on a project?
Because the Notice of Right to Lien is not a mandatory notice, failing to serve one will not affect your right to file a mechanics lien. You will simply lose the previously mentioned benefits, including being notified if a Notice of Completion has been recorded on a property.
Also, note that you can still file a Notice of Right to Lien at any time after you start working on a project. However, if you miss the original deadline, you will be required to file your notice in the local recorder’s office instead of simply sending it to the property owners.
You will also not receive any of the benefits mentioned above. If a property owner claims that they have no knowledge of your participation in their project, you will be required by the court to dispute their statement.
The only perk in filing a Notice of Right to Lien after you begin working on a project is that you may extend your lien filing deadline back to 120 days, even after a Notice of Completion has been recorded. Filing a late Notice of Right to Lien is typically done by parties who are made aware of the shortened 15-day deadline but do not have enough time to put together a mechanics lien claim.
How to serve an Alaska Notice of Right to Lien
1. Prepare the Notice of Right to Lien form
2. Serve the Alaska Notice of Right to Lien on the appropriate parties
3. Serve the most recent accounting of the unpaid amount upon owner’s request
1. Prepare the Notice of Right to Lien form
The following pieces of information must be in your Alaska Notice of Right to Lien:
(1) a legal description sufficient for identification of the real property
This is a legal description of the property, which means that you may not use a simple physical address. You must do your research to get the accurate legal property description of your project location.
(2) the name of the owner
This is the name of the owner of the property on which you are working.
(3) the name and address of the claimant
This is your name and address.
(4) the name and address of the person with whom the claimant contracted
This is the name of the party who hired you. If you are a general contractor, this may be the same name as the property owner’s.
(5) a general description of the labor, materials, services, or equipment provided or to be provided
This is a brief and general statement on what type of service you will be providing or have provided to the project.
(6) a statement that the claimant may be entitled to record a claim of lien
This is a statement of the fact that you are entitled to file a mechanics lien against their property if you do not get rightfully paid for your work.
(7) the following statement in font size no smaller than what was used in providing the information in items (1) to (6):
WARNING: Unless provision is made for payment of sums that may be due to the undersigned, your above property may be subject to foreclosure to satisfy those sums even though you may pay a prime contractor or other person for the labor, material, service, or equipment furnished by the undersigned.
2. Serve the Alaska Notice of Right to Lien on the appropriate parties
An Alaska Notice of Right to Lien must be served on the property owner(s) via certified mail with return receipt requested. Personal delivery is also an accepted method of service, as long as you secure a signed acknowledgment of receipt from the recipient.
Note that you must serve this notice before you start working on a project, otherwise you lose the main perks and advantages of serving this optional notice to begin with.
3. Serve the most recent accounting of the unpaid amount upon owner’s request
This third step is only necessary if a property owner requests you to serve them an accounting of the unpaid amount that you may be claiming. The accounting should be the most recent tally of your invoices, and it must also reflect the anticipated worth of labor or materials that you will be furnishing.
This accounting document must be served on the requesting owner within 5 days upon receiving the request.
Best practices when serving a Notice of Right to Lien in Alaska
1. Serve the Notice of Right to Lien prior to working on a project
In order to maximize the benefits of serving this optional Notice of Right to Lien, you must serve it before you start working on a project. Even if you can still serve this notice at any time after your first day of work, you are highly encouraged to mail this notice as early as you can.
Serving the notice early gets one important requirement off of your lien-related to-do list, so always try to send it promptly.
2. Keep documented proof that you have served the Notice of Right to Lien
You must always think of the worst-case scenario in mind, so even if you have successfully mailed your Notice of Right to Lien, you must still keep copies of your receipt certification and even stamped documents. If you decide to serve it via personal delivery, ensure that you have the receiving party sign an acknowledgment of receipt document.
By being diligent in keeping these mailing documents organized, your life will be easier if the payment issue gets more complicated and your compliance to serving a valid Notice of Right to Lien is questioned.
3. Ensure the accuracy of the information listed in your Notice of Right to Lien form
Serving the Notice of Right to Lien on time is one thing, serving a valid Notice of Right to Lien is another. Even if you send your notice prior to working on a project, it may lose its effect if you provide inaccurate details in your preliminary notice form.
The most common mistakes occur when a wrong legal property description is provided, so be sure that you have the correct legal address. Typographical errors are also common, so proofread your forms and make sure that complete business names are included (e.g. suffixes like Ltd. and Inc. are not dropped).
Further reading