Preliminary notices serve many purposes in a construction project. In most cases, they are required to be served on a property owner prior to recording a valid mechanics lien. Other than this, preliminary notices also promote visibility and establish communication lines among construction participants.
Vermont does not impose strict preliminary notice requirements. Potential lien claimants may file a mechanics lien without first serving this document. Nevertheless, delivering a preliminary notice in the state can still be a good practice.
This guide explains the benefits of serving a preliminary notice in Vermont and details the process of serving one if you choose to do so.
- Who must serve a preliminary notice in Vermont?
- Why serve a Vermont preliminary notice?
- When do you serve a Vermont preliminary notice?
- What happens if you fail to serve a Vermont preliminary notice?
- How to serve a Vermont preliminary notice
- Best practices for serving a Vermont preliminary notice
Who must serve a preliminary notice in Vermont?
No construction participant is required to serve a Vermont preliminary notice. Eligible lien claimants are allowed to record a Vermont mechanics lien even if they do not serve a preliminary notice on a property owner.
Why serve a Vermont preliminary notice?
There are some benefits to serving preliminary notice in Vermont, even if you are not obligated by law to do so. They are as follows:
1. It allows you to be visible to higher-tier parties.
Serving a preliminary notice is specifically beneficial to parties in the lower end of the contracting chain. By notifying a property owner of your participation in a project, you catch the owner’s attention, and they are made aware of your presence and your role. Being visible in a project is always a good thing, especially with regard to getting paid properly and on time.
2. It can speed up the payment process.
When property owners know that you are working for them, they also know that you are expecting payment for your services. Serving a preliminary notice can potentially speed up the payment process as it lets property owners track your work and your payment. They are also more likely to ensure that you get paid if they know that you are willing to exercise your lien rights.
3. It can establish communication lines among participants.
You may encounter technical or non-technical issues during the course of a project, and the solutions to these problems often involve establishing clear communication among all participants. One way to bridge the communication gap is to serve a preliminary notice at the beginning of a project. This way, you are able to talk to higher-tier parties, and they are made aware of how they can reach you back if necessary.
When do you serve a Vermont preliminary notice?
Because a preliminary notice is not mandatory in Vermont, there is no deadline for serving one. Generally speaking, however, preliminary notices may be served at the beginning of a project, usually within the first few weeks of work.
What happens if you fail to serve a Vermont preliminary notice?
You will face no lien-related consequences if you do not serve a Vermont preliminary notice. A preliminary notice is a simple, informal document that is easy to prepare, so you can still serve one even if you are not required to do so.
How to serve a Vermont preliminary notice
1. Prepare the Vermont preliminary notice form
Vermont does not require specific details for inclusion in a preliminary notice, but there are basic pieces of information that are usually found on preliminary notice forms, like the following:
- Your name and address
- The name and address of the property owner
- The name and address of the party who hired you
- A description of the property sufficiently accurate to identify it
- The contract amount or a reasonable estimate of the value of your services
You should also include a statement that says you are willing to record a mechanics lien if you do not receive payment for your services.
Some construction participants are hesitant to serve a preliminary notice because they fear property owners and general contractors may see it as a threat. Do not let this prohibit you from serving a preliminary notice. This notice is a professional document that demonstrates your knowledge of your legal rights.
2. Serve the preliminary notice
When your preliminary notice form is ready, the next step is to serve it on the property owner and/or the general contractor. You may serve the notice in person via direct delivery, or send it by mail via registered or certified mail.
There is no deadline for serving a Vermont preliminary notice, so you may serve it at any time. Parties usually serve a preliminary notice during their first couple weeks of work, or at least before a mechanics lien is recorded.
Best practices for serving a Vermont preliminary notice
1. Serve a preliminary notice even if it is not mandatory
A preliminary notice helps you become visible in a project, and it can potentially speed up the payment process. The process for completing a Vermont preliminary notice form also asks you to collect basic information such as the name and address of the property owner, and knowing these details are valuable, especially if you end up needing to record a mechanics lien.
2. Track and monitor the preliminary notices that you send out
It is important to always track and monitor the construction documents that you serve, including the preliminary notice. Organizing your paperwork and being aware of what documents have been served on certain participants are good business practices that can help your business maintain an efficient and repeatable workflow.
3. File a Vermont mechanics lien if needed
Filing a mechanics lien is arguably the best way to recover payment from a non-paying client. Serving a preliminary notice does not guarantee payment, so if payment disputes come up, recording a mechanics lien gives you a better chance of receiving your due compensation. Note, however, that filing a Vermont mechanics lien has stricter deadlines and requirements, so be sure that you are familiar with those rules.