Why do subcontractors should send preliminary notices?by Georgie Barney content writer
Preliminary notices are required to be sent by all subcontractors and sub-subcontractors. They do not have to be filed in the county, but they must be mailed through the postal service, return receipt requested. If a preliminary notice is not sent to the owner of the project and to the general contractor, the right to file a construction lien on the property gets jeopardised. These notices are often sent with the invoice, this way the contractor secures the timeline required by law.
When a preliminary notice is sent and the contractor gets paid, the notice loses any legal effect. But when payments are not fulfilled, a construction lien can be filed on the property for the amount owed.
If you have failed to timely send a preliminary notice, then you might not be allowed to file a construction lien on the property. Preliminary notices are crucial for sub-contractors and suppliers in order to secure their rights of filing a lien in case of failed payments.
The content of preliminary notices may vary between states, but most will require to have information about the project, the owner, the general contractor and the amount owed. Still, you must make sure what is required to include as well as the deadlines to follow.
Top three reasons why preliminary notices are important for subcontractors.
1. Protect your right to get paid
The preliminary notices in Texas are required to be sent to secure your construction lien rights. If you fail to send the prelien notice within the specified period of time, you will lose your right to file a mechanics lien and possibly the opportunity to get paid for the work owed.
2. Protect your business
If you are running your own construction company, sending out timely preliminary notices can save your business. At the beginning of each project, you can always inform the general contractor that your invoices will include preliminary notices to prevent missing deadlines in the event of non-payment. This will avoid any possible future misunderstanding.
3. Protect the property owner from paying twice
The preliminary notices not only protect subcontractors and material suppliers but also property owners from having to pay extra for the project.
Say, the property owner pays the general contractor, but the latter fails to pay the subcontractor. If a preliminary notice is sent, the contractor may be liable for the debt instead of the owner. The owner may also intervene to ensure that the subcontractor gets the payment.
Preliminary notices are sent out via certified mail. Take care of sending out the preliminary notices well in advance before the problem arises. Ideally they are sent out after a project begins, so being proactive is must.
Created on Mar 29th 2020 13:44. Viewed 265 times.