General contractors play a crucial role in construction projects, overseeing the work and coordinating with various parties involved. One of their responsibilities is ensuring compliance with state laws regarding preliminary notices, also known as pre-lien notices or pre-lien letters.
Preliminary notices are used by subcontractors and suppliers to secure their right to file a mechanics lien if unpaid. Although general contractors typically don’t send these notices, they often receive them from sub-tier parties involved in the project.
However, some states require general contractors to send preliminary notices to the project owner and/or the construction lender. The requirements vary from state to state, and it’s essential for general contractors to understand and comply with the laws in the states where they operate.
State Requirement
Alaska
Notice of Lien Rights may be served on owner & filed before providing labor or materials. This notice makes enforcement of the lien easier and can extend the time the lien claimant has to file the lien.
Arizona
Arizona 20-day Preliminary Notice must be delivered to owner and construction lender within 20 days of providing labor services or materials.
Arkansas
Notice of Intent to Lien is required 10 days before filing a lien. On Residential Projects, a Pre-Construction Notice to Owner is required before work. On other projects, Notice to Owner and Contractor is due within 75 days of last furnishing work and materials.
California
Preliminary 20-Day notice must be served on the construction lender (if any) within 20 days of first providing materials or labor. Tardy notice only effective for work done in the preceding 20 days.
Florida
Must provide list of all subs and suppliers within 10 days of request.
Idaho
On residential projects, must give Residential Disclosure before entering contract for more than $2000.
Iowa
On owner-occupied residential projects, the GC must provide notice of lien rights and identity of subs to be used.
Louisiana
Notice of Contract must be filed before work begins if a contract is more than $25,000.00.
Minnesota
Notice must be in contract or served on owner within 10 days after work is agreed upon.
Mississippi
May need to provide a list of subs, if requested from owner.
Missouri
Disclosure notice served on owner prior to first payment.
Montana
Notice of Lien Rights served on owner within 20 days of first delivering materials or labor and filed with recorder within 5 days of delivery to owner.
North Carolina
Notice to Lien Agent required within 15 days of first furnishing labor and/or materials.
Oklahoma
None, but unclear if notice is required on owner-occupied projects – best practice to send.
Oregon
Information Notice to Owner is due at time of contract execution for residential projects.
Rhode Island
Notice of Possible Mechanic’s Lien required within 10 days of commencing work. Notice of Intent must be given to the owner within the same 200-day period as a lien.
South Carolina
Notice of project commencement is due 15 days after commencement. This provides additional protections to the general contractor against potential lien claimants.
South Dakota
Optional notice of project commencement is due 30 days after commencement. Location Notice must be displayed at jobsite.
Tennessee
Notice to Owner must be sent prior to commencing work.
Texas
Generally none. GCs must file copy of the contract with county clerk for a lien on a homestead. GCs must provide a list of subs/suppliers to owner of residential property unless owner waived that right.
Virginia
On residential projects, when a Mechanic Lien Agent is identified in a building permit, a 30-day preliminary notice is required.
Washington
Under some circumstances, Notice to Owner is required before commencing work. Model Disclosure Statement is due before work begins on all residential projects, and commercial projects under $60,000.
Wisconsin
Preliminary Notice in original contract or served on owner within 10 days after beginning work (if oral contract) Notice of intent to lien required 30 days before lien.
Wyoming
Preliminary Notice to Owner of Right to File Lien is required prior to receiving any payment from owner (including advances). Notice of Intent to lien is required 20 days prior to filing lien.
4 Reasons Why General Contractors Should Send Preliminary Notices
Even when not legally required, sending preliminary notices is highly beneficial for general contractors. These notices inform project owners and lenders about your involvement in the project and preserve your right to file a mechanics lien if payment issues arise. Here are four key reasons why general contractors should send preliminary notices:
Faster Payments
Preliminary notices keep your payments on priority, reducing the likelihood of delays.
Avoid Lien Costs
They can prevent costly legal expenses by addressing payment issues early.
Protect Lien Rights
In certain states, not sending a notice can forfeit your right to a mechanics lien.
Enhance Communication
They help coordinate with subcontractors and manage project schedules effectively.
Bonus: Professionalism
Sending preliminary notices is a sign of professionalism. It shows that a general contractor is organized, prepared, and dedicated to proper procedures. These qualities are valued by project owners and fellow contractors.
By sending these notices proactively, general contractors can ensure smoother payment processes, avoid legal issues, secure their lien rights, improve project communication, and demonstrate their professionalism.
