You expect to get paid promptly for your hard work as a contractor, so it can be stressful (and extremely frustrating) when that doesn’t happen. Whether it’s due to lack of funds, dissatisfaction with the work, or another reason, customers sometimes don’t remit money owed for a construction project until contractors threaten legal action.
Luckily, there are preventative legal tools available to contractors to ensure they get paid for their work in advance; the two we’re focusing on today are the preliminary notice and the notice of intent to lien. Though the terms are often used interchangeably (and the required legal documents for both go by different names depending on the state), there’s a distinct difference between “sending preliminary notice” and “sending notice of intent.” The difference between preliminary notice and notice of intent lies in the implications of each document: a preliminary notice is a routine letter notifying the property owner of your work on the project, a notice of intent is a more serious warning letter demonstrating intent to lien.
If you’re a contractor who likes to be paid for their work, it’s critical that you understand the difference between a preliminary notice and a notice of intent to lien to protect your legal right to income for services rendered. And that’s where our team of experts at Northwest Lien can help!
Both the preliminary notice and the notice of intent are, in essence, legal communication channels — usually between a property owner and a subcontractor, who have no direct legal ties to (i.e., no contract with) one another. This concept applies to suppliers and laborers, too, who also have not contracted directly with the property owner, as well as prime contractors in certain states. In short, preliminary notice requirements apply to everyone … so keep reading!
Preliminary notices are an opportunity for contractors to introduce themselves to property owners and describe the services or supplies they plan to provide, encouraging transparency in their working relationship with the owner. Because it acts as an introduction, preliminary notice is usually sent long before payment is due — sometimes even before work has begun.
Nearly every state requires subcontractors and suppliers to send preliminary notice to secure their right to place a lien on construction projects, but which type of preliminary notice you’re required to send depends on factors like the size/type of the project and what role you played in it. What’s more confusing is that the phrase “sending preliminary notice” can apply to both sending a literal Preliminary Notice document (the introductory letter to the owner) as well as sending the Notice of Intent to Lien document (the more serious warning letter) because, for many projects, sending notice of intent to lien is the only notice required to preserve lien rights.
We know, we know, it’s a lot. Hang with us.
Each state calls the document required for “sending preliminary notice” by a slightly different name and enforces a slightly different deadline to file it. In California, for example, it’s known as a Preliminary 20-day Notice and can be filed at any time during the job. In Oregon, just one state away, they’ve got two different documents for sending preliminary notice:
Lien claimants who haven’t directly contracted with the owner (i.e., subcontractors, laborers, or suppliers) must file a Notice of Right to Lien within 8 days of first furnishing to preserve their lien rights. You can check out the Notice of Right to Lien form for Oregon jobs here.
Lien claimants with a direct contract with the owner (known as “original contractors” in Oregon) do not have to send preliminary notice to preserve their lien rights; however, original contractors working on “residential structures” worth over $2,000 do have to file what’s known as an Information Notice to Owner within 75 days of job completion.
In Washington, subcontractors who provided “professional services, materials, or equipment” are required to send preliminary notice (via a “Notice to Owner” document) to the property owner 60 days from first delivering materials. Note that this excludes those who only provided labor; according to Washington RCW 60.04.031, “laborers on the project may claim a lien without sending notice.”
Additionally, subcontractors working on the new construction of a single-family residence exhibit a shorter notice deadline, required to send notice just 10 days from first delivering materials.
Many prime contractors (those who have contracted directly with the property owner) in Washington are not required to send preliminary notice — the contract protects them enough already. However, for larger jobs, they are required to provide a Model Disclosure Statement, a different type of preliminary notice document.
So, are you required to send preliminary notice in the state of Washington to preserve your lien rights? Put simply, it depends. Contact Northwest Lien to ensure you’re filing and sending the correct documents for your unique situation.
Now that we’ve covered preliminary notice, let’s examine notice of intent.
A Notice of Intent to Lien, also called an Intent to Lien letter, is an official demand letter. You must take this step after sending preliminary notice but before filing a claim for a mechanic’s lien. This document has far more legal weight than the first one, which is routinely sent as a precaution. Notice of intent to lien documents, however, warn property owners that you mean business; because they pack such a legal punch, notice of intent documents typically produce better and faster results with contractors seeing payments an average of 20 days later.
The standard legal advice with a construction notice is to file both, even if your state doesn’t require it. This provides the property owner with plenty of notice that you intend to exercise all legal means of collecting a debt. You could also lose your legal right to file a mechanic’s claim if you don’t file the correct documents in order.
At Northwest Lien Service, we know that keeping track of terms, legal rights, documents, and filing deadlines can be confusing. That’s why we’re formally offering ourselves as a resource; feel free to reach out with any questions you stumble across and we’ll help you sort it all out.