Posts Tagged ‘Notice Requirements’

FAQ: What Is Preliminary Notice?

On May 4, 2011        

Short Answer: Some states require preliminary notices, others do not. In the states where preliminary notice is required, a party providing labor and/or materials must deliver a notice to certain other parties before or immediately after they begin performing work or providing materials. If the notice is required and not sent, you may lose the right to later file a lien if you are not paid.

Long Answer:

What Types of Notices Are There?  Are They Mandatory?

While the term “notice” gets used a great deal in construction circles, many contractors do not understand what is meant by “notice.” Is it a “notice of intent to lien?” Is it a pre-work “preliminary notice?”  All notices are not the same, and that was the subject of a useful blog post on this Construction Lien Blog: All Notices Are Not Created Equal: Preliminary Notice v. Notice of Intent to Lien

This is a great comparison of the differences between preliminary notices (which are sent at the start of a project before any payment is overdue) and notices of intent (which are sent when you unpaid).  Notices are not required in every state, and for the states that do require notices, the types of notices required a different.

A run-down of which states require notices and which do not are available on this blog here: Is Notice Required In My State? List of Notice and Non-Notice States. Remember also that our LienPilot can calculate your notice requirements based on your job information.

How Are Preliminary Notices Sent?

This is a very important question. In fact, if your state requires certain notices, and you send them but send them incorrectly, it may be just as bad as not sending them at all. Accordingly, sending the notice as required by statute is very, very important.  And you guessed it: Delivery requirements are different in every state.

It’s safe to say that most states require preliminary notices be sent by certified mail, or certified mail with return receipt requested. There are some instances, however, when notices must be sent by registered mail only, by mail with restricted delivery, hand delivered by courier, and/or actually filed with the county recorder.

Just as important as delivering the notice correctly is proving that you delivered the notice. California has some pretty strict requirements in this regard, which can give you an idea of what you’ll confront in proving preliminary notice delivery elsewhere.  We wrote a blog post about this here:  Strict Proof of Delivery May Be Required for Construction Notices.

Posted in:     FAQs, Preliminary Notices  /  Tags: , , ,   /   Leave a comment

The Wizard Makes Ordering the Right Document at the Right Time Easy

On November 11, 2009        

Zlien’s new Lien Wizard makes it easier than ever for contractors and suppliers to have preliminary notices, notices of intent to lien, mechanics liens and even lien releases processed.

It’s this simple:

  1. You put in your project information (state, your role, project type);
  2. The Wizard tells you the applicable notice requirements and lien deadlines
  3. You select from the list of associated documents

Zlien’s database of lien and notice deadlines and requirements is more extensive and accurate than any other database in the country.

Take a look at these screen shots to see how the first 2 screens of the Wizard works:

Step 1: Inputting Your Project Information

The first step is easy.    The Wizard asks four basic questions about your project – the state where you are working,  your role in the project, who hired you, and what the type of project.

Lien laws vary state-by-state, but they also vary depending on those other three factors.   It is common for states to impose heightens notice requirements for residential projects…and oftentimes, notices are required only from subcontractor and those without a contract with the owner (rather than from everyone).

The Wizard Makes Ordering the Right Document at the Right Time Easy

Step 2: Getting Applicable Notice and Lien Requirements for Your Project

With the small amount of information you provided, the Wizard pulls and displays from its database only the information, requirements and deadlines that are relevant to your project.

Once you’ve read over the notice and lien requirements, you’ll be ready to choose the type of document you want to file or send.   Even this component of the Wizard is tailored to your project, as only the documents relevant to you and your project will display.

The Wizard Makes Ordering the Right Document at the Right Time Easy

Watch It On Video

Screen shots just not doing it for you?

Take a walk-through of these first two steps on video:

And remember, a database is just a database.   It has limitations.   We feel great about our product and its ability to display to you the relevant laws, notice requirements and lien deadlines.   However, there will never be a substitute for a real live attorney reviewing your specific project.  Zlien is not a law firm.

Posted in:     Lien Management, Web Updates  /  Tags: , , ,   /   Leave a comment

Pro-Owner ‘Trick’ in the Delaware & Pro-Contractor ‘Trick’ in the Louisiana Lien Statutes

On April 9, 2009        

Here and there, there are statutes within a state’s lien laws that allow a property owner to place a duty of performance on subcontractors and contractors.

When representing property owners, savvy construction attorneys will recommend that these statutes be utilized to protect the owner from future liens.

An example of these types of statutes can be found in Delaware, under the Code Title 25, Section ¶2705.  The statute provides simply as follows:

The owner of any structure built, repaired or altered by any contractor or subcontractor may require such contractor or subcontractor from time to time to furnish and submit to him a complete and accurate list in writing of all persons who have furnished labor or material, or both, in connection therewith, and who may be entitled to avail themselves of the provisions of this chapter. Should any such contractor or subcontractor fail to furnish such list for 10 days after demand made therefor by such owner, he shall be entitled to receive no further payments from the owner until such list be furnished and shall not be entitled to avail himself of any of the provisions of this chapter.

What does this mean?

Well, quite simply, if an owner makes this “demand” in writing, the contractor or subcontractor ought to immediately comply or risk losing the ability to file a lien.

Unlike Delaware, Louisiana has a reverse requirement…allowing the contractor or subcontractor to burden the property owner with future performance with the risk of penalty for non-compliance.

La. R.S. 9:4822(K) provides that any person with lien rights may give a certain notice to the property owner, and if provided properly, the owner will be required to notify that person within 3 days of the filing of a notice of termination, the substantial completion or the abandonment of the work.  Of course, these events trigger time requirements under the lien statute.

What happens when an owner fails to provide this notice?   They are liable for “all costs and attorney’s fees for the establishment and the enforcement of the claim.”

Working on a private project in either state?  Both the Delaware and Louisiana notice can be ordered from Zlien today.

Posted in:     Lien Management, Preliminary Notices  /  Tags: , ,   /   Leave a comment

Illinois Contemplating Amendment to Mechanics Lien Statute

On February 18, 2009        

It appears that the Illinois legislature is contemplating an amendment to its mechanic’s lien statute, as reported last week by the informative Illinois Construction Law Blog. According to that blog post, the guts of the amendment would require contractors (non-subs) to given written notice on owner-occupied single family residences prior to filing a lien.

According to the blog, this requirement already exists for subcontractors, and the purpose of the amendment would be to extend the requirement to contractors who contract directly with the property owner.

The Illinois Construction Law Blog does weigh the pros and cons of the bill.

In their discussion, they mention that the bill makes sense because homeowners cannot be considered as sophisticated as commercial property developers.

On the other hand, however, since the bill would only require notice before filing the lien, the blog states that notice could be given the day before the lien is filed. Of this time frame, the author asks “what protection does that afford the home-owner?”

A similar requirement exists in Louisiana, according to Wolfe Law Group’s Construction Law Monitor. They describe the requirement as follows:

Notice is required whenever you are working on a residential project, and you contract directly with the owner of the property, who also lives in the residence.

The type of notice required is called the “Notice of Lien Rights.”

The Notice of Lien Rights to be sent to owners in residential projects is very important, because the law requires that it be provided before work begins, and not as a condition to your construction contract.

Read full article here.

The difference between the Louisiana requirement and the requirement in Illinois, however, is that in Louisiana notice is required before work begins, and in Illinois, its required only before filing the lien. Perhaps the goals of the Illinois legislature would be better achieved by a rule similar to that of Louisiana’s?

Nevertheless, for the time being, the requirement does not exist at all for contractors in Illinois, and is only a twinkle in the legislature’s eye. You can track the progress of the bill at this link.

Posted in:     Lien Law Alerts  /  Tags: , , , , ,   /   1 Comment

7 Habits of Contractors Who Lose Money…and How to Break Them

On December 23, 2008        

The Construction Commando’s “Contractor’s Secret Weapon” published an article with this title that described seven instances when contractors lose money on a project.  While the article was drafted to an audience of California contractors, the habits apply nationwide.

It will be to any contractors’ benefit to review this article online, access which habits apply to you, and make an effort to avoid the costly mistakes.  Any progress will help increase your bottom line.

The seven habits highlighted are:

1)    The “Gentlemen’s Agreement” – A Handshake and Your Word.   Bottom line:  Get it in writing.
2)    Using Contracts that Fall Short of the Legal Requirements.
3)    Not Getting Every Change Order in Writing.
4)    Failing to invoice immediately.
5)    Failing to serve a preliminary 20-day notice (pre-lien construction notices)
6)    Don’t Worry – They Will “Take Care of You” on the Next Job
7)    It isn’t good “customer service” to record a Mechanic’s Lien

Posted in:     Collection Laws & Tips, Mechanic Liens, Preliminary Notices  /  Tags: , , , , , , , , , , , , , , ,   /   Leave a comment
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