Monthly Archives: July 2014

Are You Paying Too Much for a Preliminary Notice?

The cost to research, prepare, and serve a preliminary notice (also referred to as a “prelim”) is based upon some very simple principles.

  1. Time to conduct research and verify the information so the prelim will in fact be valid once it is served.
  2. Time to enter this information into the most current prelim form, which complies with the current state statute.
  3. The cost of the method you choose for the actual serving of the prelim. This is based on many variables. Example:
    a.) Do you want to secure “Proof of Receipt” by the entity being served at the time of service? Or
    b.) Do you want to lessen your cost and serve the notice by securing “Proof of Service”? (both methods satisfy the requirements of the state statute for serving a prelim)

So, how much should this cost?

Let’s break it down:

  1. Time to research and verify. As this is usually the most time consuming part of prelim process. It is safe to use an estimate of 30 minutes on average to complete the research and verification.
  2. Assuming that the data entry is completed using some pre existing template inside of a Word Processing or Database program. The data entry, printing, and proofing, should not take much more the 15 minutes.
  3. The method most will choose to serve a prelim is: “First Class Certified Mail”. This is the same for everyone who must serve a prelim. This cost is only $3.78 per service.

So if you have an employee who may earn $12.00 per hour, perform this service. And the prelim you serve needs to be served on only one entity (the property owner). Then your hard cost to have a prelim served may be only $15.78.

So now you should ask two questions:

First Question is: Why should I be charged $30.00 or $40.00 to have a service, serve a prelim for me?

The answer is: Almost every prelim served is served upon:

  1. The Property Owner
  2. The General Contractor
  3. The Construction Lender

That’s right (3) separate services and (3) different locations with (3) different proof of service.

So the base cost is more like: $12.00 + $11.34 (3 x $3.78) or $23.34

Keep in mind, we have not considered paper, printing, the trip to the post office, payroll taxes, etc., etc. Therefore the real cost could be somewhere around $25 – $27 per average prelim.

Second Question is: How can a Preliminary Notice Service offer to do the process for only $15.00?

Good question. Think about it. The answer is: They cannot. Even when you only have one entity to serve. The cost should exceed $15.00.

So how can anyone advertise a served prelim for $15.00?

One way is to skip the research and just serve the owner and hope that it works to protect your lien rights. The other may be to let you know after the fact that they will be charging you $15.00 each for everyone served. That could end up costing you $45.00 for one completed prelim.

Bottom line is: Use someone you can trust. Anyone offering a “Too good to be true price” is the type of document processing partner you may want to think about before exposing your customers. Once you have done the math, the true cost is easy to estimate. Anyone offering price below realistic cost must be cutting corners someplace. Is that the company you want calling your customers and serving your prelims?

For fair and reasonable pricing, turn to CRM Lien Services. ContactUS today for a proposal for our Preliminary Notice services. You will be glad you did and so will your customers.

Frequently Asked Questions about Filing a Mechanics Lien in Georgia

Before you provide labor or materials to a construction project in Georgia, make sure you are fully aware of your Mechanics Lien Rights and your legal requirements as far as filing a Mechanics Lien is concerned. Just as in any other state, filing a Mechanics Lien in Georgia requires you to have specific knowledge of the Georgia Lien Law and its provisions. A simple error in your Preliminary Notice, Notice to Contractor, or Mechanics Lien will invalidate your claim, may cause you to forfeit your Lien Rights, resulting in a total loss of the Accounts Receivable you are trying to secure. In order to help with your understanding of the Georgia Lien Law and prepare you for filing your claim, we’ve provided a list of the most common questions asked about filing a Georgia Preliminary Notice, Notice to Contractor (of Notice to Subcontractor), and Mechanics Lien.

  • Who can file a Georgia Mechanics Lien? Like other states, Georgia is very specific about who may and who may not file a Mechanics Lien. Contractors, subcontractors, materialmen to subcontractors and contractors, contractors/subcontractors/materialmen furnishing material to subcontractors, laborers, registered architects, registered professional engineers, registered surveyors, mechanics of all sorts who have taken no personal security for the work performed or materials furnished, machinists/manufacturers of machinery, and equipment renters. NOTE: Unlicensed parties who are required to be licensed in the state of Georgia (according to state law) are not entitled to Mechanics Lien protection.
  • Am I required to file a Preliminary Notice in Georgia? The filing of a Preliminary Notice is not a common practice in the state of Georgia. You are only required to file a Preliminary Notice if the Property Owner files a Notice of Commencement at the start of the construction project and you are not in direct contract with the Property Owner. Businesses may secure their Georgia Mechanics Lien Rights, however, by filing a Notice to Contractor (or Notice to Subcontractor).
  • If I’m not required to file a Preliminary Notice, how do I protect my Lien Rights? In Georgia, those conducting business in the construction industry may protect their Mechanics Lien Rights by Serving a Notice to Contractor or Notice to Subcontractor. Subcontractors and suppliers who do not have direct contact with the General Contractor are required to provide the Property Owner and General Contractor with a Notice to Contractor if a Notice of Commencement has been recorded and posted at a job site. If you provide work or supply materials for a subcontractor, you are also required to serve a Notice to Subcontractor.The Notice to Contractor or Notice to Subcontractors must be sent by registered or certified mail or statutory delivery (such as UPS or Fed Ex overnight service) to the Property Owner and General Contractor at the addresses detailed in the Notice of Commencement.
  • When is the deadline to file a Georgia Mechanics Lien? According to Georgia Lien Law, claimants must file and serve their Mechanics Lien within 90 days of the date they last supplied materials and labor on the project.
  • Do I need to provide a copy of the Mechanics Lien to the Property Owner? Yes. Georgia Lien Law requires the lien claimant to serve a copy of the Mechanics Lien upon the Legal Property Owner. This can be served through certified or registered mail, or by overnight delivery (such as FedEx). If for some reason you are unable to locate a valid address for the Property Owner after performing your due diligence, you may serve the Mechanics Lien on the prime contractor as the owner’s agent. However, you must be able to substantiate that you were unable to find the Property Owner (and be able to provide documented evidence of the processes you used to locate the property owner.) prior to serving the prime contractor.The filing and serving of this notice is essential. It must be served within 2 days of the filing of the Mechanics Lien.
  • Am I required to provide a Legal Property Description in my Georgia Mechanics Lien? No. While it is preferred, it is not required in the state of Georgia. According to Georgia Lien Law, you need only to describe the Property with sufficient information in which to be identified. However, we recommend that you be as specific and formal as possible with the description of the property in order to ensure your Lien Rights. Should the Legal Description of the property be available, please include it along with any other address information you have verified.
  • How long will my Georgia Mechanics Lien remain in effective? All lien claimants must initiate the enforcement of the Mechanics Lien within 1 year from the date on which the lien was originally filed. Failure to adhere to this deadline will result in the invalidation and expiration of your lien claim.

These are just a few of the key provisions included in Georgia’s Mechanics Lien Law. For a more comprehensive understanding of how you may further secure your Mechanics Lien Rights, hire a Preliminary Notice and Mechanics Lien Service to prepare and serve your Georgia Preliminary Notice and Mechanics Lien. Using a professional service will ensure that the proper research is done so you don’t run the risk of forfeiting your Lien Rights due to any misinformation or unplanned delays.

CRM Lien Services will thoroughly research and verify all of the information included in your Preliminary Notice and Mechanics Lien so your Lien Rights are completely protected. At CRM, we stay current with the changes to the Georgia Lien Laws so your notices are prepared according to the most current Georgia Lien Law statutes.

If you’d like to request a proposal for our services, click here.

Five Common Questions about the Florida Lien Law

Do you provide labor and materials to construction projects in Florida? If so, it’s important that you understand the basics of the Mechanics Lien Statute under the Florida Lien Law. The following are some key components to understand that will help you to: Preserve, Perfect and Enforce your Florida Mechanics Lien Rights.

Here are five of the most frequently asked questions regarding the Florida Lien Law:

  1. Do I have to serve a Notice to Owner “aka: Preliminary Notice” in the state of Florida?
    While there are certain exceptions, the safest answer is yes. If you fail to deliver a Notice to Owner “aka: Preliminary Notice” at the start of furnishing labor or materials, you stand the chance of losing your Florida Mechanics Lien Rights. If you did not contract directly with the Property Owner, then you must serve a Notice to Owner within 45 days of furnishing labor and/or materials to the project. Your Notice to Owner must contain all of the information required by the statute and must be sent to all the parties as required by statute.
  2. Who can file a Florida Mechanics Lien?
    Florida’s Mechanics Lien Law protects a broad spectrum of workers, including: Prime contractors, subcontractors, sub-subcontractors, labors, material suppliers to the owner/contractor/sub/or sub-sub, and professionals (engineers, architects, landscape architects, mappers, surveyors, and interior designers).
  3. What is the deadline to file a Florida Mechanics Lien?
    According to Florida Lien Law, all Lien claimants have up to 90 days after the date they last supplied labor and materials to the construction project to file a Mechanics Lien.
  4. What should be included in the Mechanics Lien?
    The state of Florida has strict requirements regarding what your Mechanics Lien must contain. For a full list, see F.S. § 713.08. Here are a few of the basic requirements you need to be aware of:

    • Identification of the hiring party (the person or company who hired you)
    • Description of the labor, materials or service furnished to the project
    • Legal Property description
    • Identification of the Property Owner
    • The contract price or full value of the services furnished
    • Date of services (first and last dates furnished)
    • Final amount due and unpaid to you

It’s important to note that Florida Statute is very specific about what you can claim in your Mechanics Lien. Filing a Mechanics Lien without compliance with the statute is considered “fraudulent” and carries the consequences of a 3rd degree felony. You may not include amounts for unapproved charges, claims and lost profits on unperformed work, just as you may not include costs for attorneys, interest, or Lien fees, unless your signed contract specifically address these issues.

  1. When is the deadline to enforce a previously filed Florida Mechanics Lien?
    In general, a Mechanics Lien must be enforced within 1 year of the date the Lien was first filed; however, in certain cases this time period can be shortened or extended. Once the time period is up, your Mechanics Lien is considered expired unless you file a lawsuit to foreclose about the property and the Lien. This is a very important part of the entire lien law. By filing a mechanics lien you only begin the process of collecting your outstanding accounts receivable. Should you file the mechanics lien then allow the 1 year timeline to elapse without commencing action. Your mechanics lien will become void on the 366th day after it is filed, leaving you without the protection of the lien as a tool to secure your open accounts receivable.

These are just a few key provisions included in Florida’s Mechanics Lien Law. For a more comprehensive understanding of how you can fully protect your Mechanics Lien Rights on Florida construction projects chose a partner like CRM Lien Services to assist you with this process.

CRM Lien Services will thoroughly research and verify all of the information included in your Notice to Owner and Mechanics Lien so your Lien Rights are fully protected. At CRM, we stay current with the changes to the Florida Lien Law so your notices are prepared according to the latest statutes.

Would you like CRM Lien Services to file your NTO? click here.