Preliminary notice

How a preliminary notice works

A preliminary notice is the first step in protecting lien rights in many states. It tells the property owner, and often the general contractor and the construction lender, that you are supplying labor, materials or equipment to the job and expect to be paid. It doesn’t claim that anyone owes you money yet.

Who must send one depends on the state. The rule usually targets parties without a direct contract with the owner: subs, sub-subs and material suppliers. In some states, contractors who do contract directly with the owner have notice duties too, and some states exempt certain parties or job types.

The content is usually short and often set by statute. A typical notice includes:

• Your company name and address, and who hired you.
• The owner’s name, the general contractor and any construction lender.
• The property address or legal description.
• A description of the labor, materials or equipment you are supplying.
• In some states, an estimate of the total value of what you’ll supply, and statutory warning language for the owner.

Timing is the part that trips people up. Deadlines are usually counted from the first day you furnished labor or materials, not from the contract date or the first invoice. In some states, a notice sent late still protects work furnished within a set window before it was sent, but not anything earlier.

Preliminary notices and other lien notices

The preliminary notice goes by different names: California uses a 20-day preliminary notice, Florida uses a Notice to Owner, and other states use a notice of furnishing or a pre-lien notice. It is also easy to confuse with the other notices that come up in a lien process.

Not every state uses every notice, and the deadlines tied to each differ. Check your state’s lien statute for which ones apply to you.

Why preliminary notices matter to each party

For subs and suppliers

In states that require it, the notice is the price of admission for lien rights. Skip it or send it late, and a lien may be unavailable even if you did the work and were never paid. It costs little to send and can be worth the full contract amount later.

For homeowners and property owners

A preliminary notice tells you who else is working on your property and could lien it. It isn’t a sign of trouble. Keep each one, and before you make a payment, ask the general contractor for lien waivers from every party that sent you a notice.

For general contractors and lenders

Notices show who is on the job and what their work is worth. A general contractor can match them against its own sub list and collect waivers from each party before paying. Lenders use them to decide whose waivers to require before releasing a draw.

How to send a preliminary notice step by step

1. Before you start, check whether the job’s state requires a notice from a party in your position, and what the deadline is.
2. Get the job information in writing: the legal owner, property address, general contractor and construction lender. Check the owner against the property records, not just what the general contractor tells you.
3. Use the statutory form if the state has one, and fill in every required field, including any estimated value.
4. Note your first day of furnishing labor or materials, since the deadline usually runs from it.
5. Send the notice to every required party by a method you can prove, such as certified mail, well before the deadline.
6. Keep a copy of the notice and the proof of delivery in the job file.
7. If your scope or value changes significantly, check whether your state calls for an updated notice.

Many contractors send a notice on every job where it’s required, as routine. That avoids the awkward decision of whether a particular client deserves one, and it means the paperwork is already done if a payment problem ever comes up.

Preliminary notice example with numbers

Say a lumber supplier sells a framing package to a framing sub on a new house, delivered in three loads. For illustration, say the job’s state has a rule that a late notice covers only materials furnished within 20 days before it was sent, plus anything after. Real windows and rules vary, so check your state’s statute.

The supplier sends its notice on day 30. Under the rule above, the window reaches back to day 10. Load 2 on day 25 and load 3 on day 40 are covered, so $3,000 + $2,000 = $5,000 is protected. Load 1 on day 1 falls outside the window, so $4,000 of the $9,000 total has no lien protection.

If the framing sub never pays, the supplier can lien for $5,000 at most, and has to chase the other $4,000 under its account terms with the framer. Had the notice gone out on day 2, all $9,000 would have been protected.

Common preliminary notice mistakes

• Counting the deadline from the contract or the first invoice instead of the first day on site or first delivery.
• Naming the wrong owner, often a tenant or the general contractor’s idea of the owner instead of the owner of record.
• Leaving out the construction lender when the state requires notice to it.
• Sending it by regular mail or email when the state requires a provable delivery method.
• Skipping it for repeat clients, then needing lien rights on the one job that goes wrong.
• Treating the notice as a threat and apologizing for it, instead of explaining it’s routine.

Most of these are avoided with a short checklist on every new job: who must receive the notice, by when, and how. Fill it in on the first day, not when the first payment is late.