Скачать или смотреть 3 Important Steps to Take After Receiving a Preliminary Notice

Sending Preliminary Notices is one of the most effective ways to prevent payment disputes. Learn these crucial steps you should take to keep your project running smoothly.

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Depending on which state you’re in, Preliminary Notices are also called 20-day Notices (California & Arizona), Notices to Owner (Florida), Monthly Notices (Texas), or even Pre-liens. These documents get sent at the start of a job to let other stakeholders know who you are and what you’re providing on the project. Sending these documents, even when they aren’t required, is considered a best practice.

Legally speaking, you don’t really have to do anything. However, this doesn’t mean that you should just forget about it. Keeping track of the Preliminary Notices that you’ve received is the first step in the right direction to avoid payment disputes. Make sure you do the following on every project:

1. Keep on file the information on your Preliminary Notices (Pre-liens, 20-day Notices, Notices to Owner, Monthly Notices, etc) (1:02)

When you receive a prelim, it’s typically from a sub or a supplier that you may not have personally hired. A Preliminary Notice from them usually has their company name, contact info, and what they’re doing on the project. So, it’s good to keep this information on hand. Enter the sender’s info into your accounting software or database of vendors so you have it on file.

If anything looks out of the ordinary on the notice, it might be a good idea to hop on a quick phone call to make sure that everyone is on the same page. Let them know you have the notice, and if needed, clear up any misunderstandings that you might have. If a payment dispute arises later on for whatever reason, you’d want them to communicate with you to figure things out, instead of jumping directly into a lien claim, lawsuit, or other expensive actions. Establishing a relationship and a communication line at the beginning of the project will go a long way here.

2. Make sure everyone who’s sent you a Preliminary Notice gets paid so you can prevent Mechanics Liens or Bond Claims being filed on your project (2:00)
When it comes time for payment, it might be time to take another peek at your Preliminary Notice records. This will help you identify when and where payments should be moving. If a payment dispute from a sub tier party does arise, it’ll be easier to connect the dots and sort through the issue. Additionally, keep in mind that the parties who sent Preliminary Notices have likely preserved their mechanics lien or bond claim rights on the job. Claims like these can cause a multitude of headaches, so it’s often a good idea to make extra sure that everyone who’s sent a Preliminary Notice gets paid.

3. Collect Lien Waivers from everyone to avoid double payment and potential lien or bond claims (2:46)

Preliminary Notice records can help you pinpoint who you should collect Lien Waivers from. Lien Waivers should really be collected every time payment is made. By cross-referencing your Preliminary Notice records, it should be easy to make sure all waivers are accounted for. Again, parties who have sent Preliminary Notices have likely preserved their lien rights - so collecting waivers from those parties is doubly important.

Levelset’s mission is to empower contractors to always get what they earn. Levelset’s products help millions in the construction industry each year to make payment paperwork and compliance easier, get cash faster, monitor the risk on jobs and contractors, and better understand payment processes and rules. The results are faster payments, access to capital, and fewer surprises. Backed by investors like Horizons Ventures, S3 Ventures, Altos Ventures, Operating Venture Capital, and Brick & Mortar Ventures, Levelset is headquartered in New Orleans, Louisiana, with offices in Austin, Texas, and Cairo, Egypt, and is over 200 employees strong. Learn more at www.levelset.com.


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