FAQ: Can I Cancel A Preliminary Notice?

FAQ:  Can I Cancel A Preliminary Notice?

Short Answer:  No, there’s no reason to.

Long Answer:  This question is asked a surprising amount. After someone gets paid on a construction project they may be interested in “canceling” their preliminary notice. There is no such mechanism for this anywhere in the nation, however, and anyone demanding that you cancel the preliminary notice document doesn’t truly understand it or its effect.

A preliminary notice document doesn’t exercise any rights at all, and therefore, there’s nothing to “un-do” about a notice.  The notice merely acts to preserve rights so they can be exercised in the future.  If you get paid on the project, there’s no need to “un-preserve” your rights. The solution is simply that you will not exercise the rights, because the right is no longer there – it has been extinguished with payment.

There may be some confusion about this that arises from general contractors who require subcontractors and suppliers to execute lien waivers if they had previously submitted a preliminary notice. These general contractors oftentimes use software (Like Textura) to track which suppliers and subcontractors deliver preliminary notices, and then to track the lien waivers executed by those parties. That way, each preliminary notice is matched with a lien waiver, and the mechanics lien exposure is reduced.

This is not, however, a “cancellation” of the preliminary notice. It’s just an offset of it. There’s no such thing, and there’s no way to formally cancel a preliminary notice document.

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Scott Wolfe Jr

About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of The Lien and Credit Journal, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.