Pre Lien Notices are important legal documents. They are sent to both a general contractor and a property owner. They have to conform by a number of different rules in order to be valid. Even the slightest mistake in any of the paperwork elements will render the lien invalid, which can cost the contractor in particular dearly.
The Rules around Pre Lien Notices
- The notice must be sent by registered or certified mail.
- The notice must highlight exactly which debt is owed in terms of materials and/or labor.
- Statutory notice must be used in the notice, and this language varies depending on the state.
- The pre lien must be served at a specific date. This is different from the filing. This date has to be a certain time period after the provision materials and/or labor to the property owner. Again, the exact terms depend on the state.
If any of these criteria are not met, the pre lien notice will not be valid. This also means that construction funds cannot be withheld from the property owner to the general contractor in case no payment is made for the work that has been completed.
If the statutory deadline is missed, even if it is just a single day, the right to file a lien at a later stage against the property is likely to be waivered.
Insider Tips on Pre Lien Notices
There are two very important tips on pre lien notices.
- Every time a document is prepared or served linked to the claim, it should be used to forcefully demand the payment. Demanding payment can only be done a certain amount of times, and you must make sure you take advantage of all of the times you can use. Take a look at a pre-lien notice here to see how this can be done. A strong Payment Demand Letter is a good example, which should be served to every person who has any involvement with the lien. The goal of a lien is not to file a lien, but to get paid. Being forceful and stating that things may go to court is often enough to make someone pay the money that they owe.
- The property owner does not have to be notified of the intent of filing a lien by the original or general contractor. However, it can be recommended to send a payment demand letter that highlights the next step will be a lien. Again, this increases the chances of someone making the payment. This is because most people do not want to go through the hassle and expense of going through lien procedures. Hence, while there is no obligation to tell someone that a lien is going to be filed, it can help to mention it to shock them into paying.
The most important thing is that liens must follow a number of significant rules. This is why it is important to work together with professionals to have it completed.