The Preliminary Notice requirements vary from state to state, which is why it’s beneficial to have a Preliminary Notice Service Provider who keeps track of each state’s requirements. Depending on the state or states where you conduct business, you may or may not need “Proof of Receipt” for your served Preliminary Notices. As we’ve discussed in past articles, some states require contractors and subcontractors to serve a Preliminary Notice to establish their lien rights while some states do not. Understanding your state’s mechanics lien statutes is crucial to knowing whether or not you will need “Proof of Receipt” of your served Preliminary Notices.

If the Preliminary Notice is “Non Statutory” it will never be needed to support a Mechanics Lien. Therefore, you may never need “Proof of Receipt”. (see our blog on “Non Statutory Notices” for a more detailed explanation. )

However, if the Preliminary Notice is required to support a Mechanics Lien, you will surely need “Proof of Receipt” before the Mechanics Lien can be filed or recorded. The “Proof of Receipt” serves to verify that the Preliminary Notice was received by the correct owner. And that the owner was aware that he may become liable to you if you are not paid according to your contract for the improvements you helped to make to the owner’s real property. If the required proof is not available, a court may find that you only complied with serving requirements for the Preliminary Notice and failed to comply with the “Proof of Receipt of a Preliminary Notice” requirements for perfecting a mechanics lien. The “Proof of Receipt” is designed to comply with the statutes governing the proper filing of a mechanics lien

So why not serve the Preliminary Notice with Proof of Receipt requested every time? The simple answer is that very few of the Preliminary Notices served will ever be needed to support a mechanics lien. The preliminary notice served with proof of receipt usually cost upwards of 20 – 25% more per notice. It is true that by serving all preliminary notices by Certified Mail Return Receipt Requested you will never be confronted with needing to request proof prior to filing your mechanics lien. However, the overall cost tends to be somewhat frivolous and unnecessary.

Consider this: You have your preliminary notice served within 20 days from the first day you begin to work on the job. You continue on the job for 6 months before your part is completed. The job last another 7 month before the General Contractor completely finishes and turns the property over to the owner. Think about it. 7 months have elapsed since you finished the job. Are you still owed money after being done for 7 months? If so, you now have 11 more months to request your “Proof of Receipt” from the US Postal Service while you may only have 3 months before you must file your mechanics lien. The Good News is that there is plenty of time to get the Proof of Receipt you need to file your mechanics lien. In fact, there is a better chance that the 3 months time to file a mechanics lien slips by you then there is that you forget to get Proof of Receipt of your preliminary notice.

Obtaining “Proof of Receipt” is not difficult. By serving the Preliminary Notice by Certified Mail through the U.S. Postal Service, you always have the option to obtain a “Proof of Receipt”. In fact, the USPS maintains “Proof of Receipt” for all Certified Mail for up to 2 years after delivery. This should be more than enough time to request proof of receipt for any preliminary notice and have your mechanic lien served with confidence.

Keep in mind that if you file a Mechanics Lien without first securing “Proof of Receipt” for your Preliminary Notice your Preliminary Notice may be dismissed, rendering your mechanics lien invalid. Don’t make this mistake. If a Preliminary Notice is required in order for you to file and record a lien, make sure you are protected by obtaining a “Proof of Receipt”. In these economic times, you cannot risk losing income because you failed to file the necessary forms or obtain the required proof.

We have been helping contractors and subcontractors prepare and serve Preliminary Notices for over 25 years on construction projects in all 50 states. If you have any questions about lien requirements in your state or would like to start protecting your lien rights, give us a call today at 1-800-PRELIMS.