In most states, preliminary notice requirements vary depending on a construction party’s role in a project. The same rule applies in Wisconsin, where general contractors and other parties who have no contractual relationship with a property owner must serve different preliminary notices.
Wisconsin subcontractors and material suppliers who have no direct contract with a property owner are required to serve what is known as the Subcontractor Identification Notice. This notice informs a property owner that you are performing work on their property and it also obligates them to serve a copy of your notice on the mortgage lender.
This guide will walk you through the details of how to serve the Subcontractor Identification Notice. Be aware that while this preliminary notice is a mandatory document in Wisconsin, it is served purely for information purposes and is not a substitute for an actual mechanics lien.
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Parties required to serve a Subcontractor Identification Notice in Wisconsin
All construction parties other than the general contractor are required by law to serve a Subcontractor Identification Notice. This includes not just subcontractors but also material suppliers, consultants, or designers who have no direct contract with a property owner.
When to serve a Wisconsin Subcontractor Identification Notice
A Subcontractor Identification Notice must be served within 60 days of first furnishing labor or materials to a property.
What happens if you fail to serve a Subcontractor Identification Notice?
Failing to serve a Subcontractor Identification Notice will result in the revocation of your lien rights. This means that if you do not serve a valid Subcontractor Identification Notice, you are not allowed to file an enforceable mechanics lien if payment issues arise.
If you serve the Subcontractor Identification Notice after the 60-day time frame, you will still have your lien rights intact as long the notice you served is properly filled. However, you may only claim a mechanics lien for the work that you have done after the property owner has received your late Subcontractor Identification Notice.
How to serve a Subcontractor Identification Notice in Wisconsin
1. Prepare your Subcontractor Identification Notice form
The Wisconsin Subcontractor Identification Notice form must have the following information:
- Your name and address
- The name and address of the property owner
- The date when you first performed labor or furnished materials for a property
- The street address or legal description of a property
- The following statement:
“Please give your mortgage lender the extra copy of this notice within 10 days after you receive this, so your lender, too, will know that the undersigned is included in the job.”
You Subcontractor Identification Notice must be substantially in the following form, as prescribed by Wisconsin lien laws:
2. Serve the Subcontractor Notice on the property owner
Once your Subcontractor Identification Notice has been filled, you have to serve it on at least one of the property owners via certified mail with return receipt requested or personal delivery.
Note that you have to serve two signed copies on the property owner. This is because a copy of the Subcontractor Identification Notice must be served by the property owner on their mortgage lender within 10 days of receiving the notice.
Also be aware that if a property owner or lender questions your compliance to the notice requirement, the burden to prove that you have failed to serve the Subcontractor Identification Notice is on the property owner. However, you must still keep a documented proof that you have served this notice in case your mechanics lien gets contested in court.
Best practices when serving a Subcontractor Identification Notice
1. Serve the Subcontractor Identification Notice as early as possible
You have 60 days after first performing work on a property to serve the Subcontractor Identification Notice on the property owner. This is a relatively long time frame, but it is considered a best practice to serve the notice way before the deadline approaches.
Serving a preliminary notice early gives you time to double- and triple-check the details that you are including in your notice. It also reduces the risk of serving your notice after the deadline so it ensures that your lien rights are protected in full.
2. Utilize Wisconsin’s Department of Financial Institution to verify the property owner’s business name
If the property owner is a business entity, you are likely to find their full business name under Wisconsin’s Department of Financial Institution’s (DFI) records. This will be helpful since minor spelling mistakes or an incorrect business name may result in an invalid Subcontractor Identification Notice.
Make sure that you cross-check your information against DFI’s records to ensure that your Subcontractor Identification Notice is accurate.
3. Ensure that you have documented proof of serving the notice
Keep your mailing documents if you are serving the preliminary notice via certified mail with return receipt requested. If you are serving it via personal delivery, ensure that you at least have the recipient sign an acknowledgment receipt.
This is to ensure that you have documentary proof in the event that your mechanics lien gets questioned based on your compliance with the notice requirements. If you keep your paperwork and receipts organized, you are likely to make a stronger case.