The Notice of Intent to Lien (NOI) is a mysterious document. While it is only required in a select few states, claimants all across the United States send this form. Even though a preliminary notice is required in most states, and a mechanics lien can be filed in all states, it’s the Notice of Intent to Lien that is perhaps our most popular filing at zlien.
What Is A Notice Of Intent To Lien?
A notice of intent to lien is a lot like a demand letter. It is a document sent to certain parties on a construction project warning that if payment isn’t made, the claimant intends to file a mechanics lien.
A few states require parties to send a notice of intent to lien before they file a mechanics lien or bond claim. These states are:
- North Dakota
It is important to distinguish this brand of notice from the preliminary notice.
The preliminary notice must be sent within a few days of when work begins, sometimes long before any amounts are owed or overdue on the project. The notice of intent to lien, on the other hand, is sent only after work is completed and payment is outstanding. It is delivered to a party immediately before filing a lien, usually 10 or 30 days before the filing.
Should You Send A Notice of Intent To Lien?
The short answer is that notices of intent to lien are frequently successful at producing payment, and may be worth sending. It’s a fraction of the cost you’ll spend on a mechanics lien or bond claim, and in many cases, it’s enough to nudge the parties to pay your claim.
Sending a NOI is also less dramatic than filing a mechanics lien. Whereas a mechanics lien will interfere with the property record and debts, a NOI is only a letter. It is usually not recorded with any official government office.
That being said, an NOI will usually get the message across enough to resolve your payment dispute.
If a party is refusing to pay your claim or ignoring your phone calls, sending a notice of intent to lien to that party, the prime contractor and/or the property owner will raise eyebrows. It will get the property owner breathing down your customers neck, and your debt will become a priority.
Sometimes, of course, a notice of intent to lien is not enough. Sometimes, it isn’t the “bringing more parties to the table” factor that is likely to get you paid, but some other effect of the mechanics lien. You’ll be in the best position to know whether the notice of intent to lien might work for you. Chances are, however, that it may.
Beware: Notices Of Intent To Lien Deliveries Can Be Dangerous
Unfortunately, I’ve seen many claimants lose their right to file a mechanics lien because of the notice of intent to lien, or rather, a misunderstanding about the notice of intent to lien.
You have to remember two key facts when you’re preparing to send a notice of intent to lien.
First, the notice of intent to lien will not delay or extend your mechanics lien deadline. If your deadline is in five days, you simply don’t have time to file a mechanics lien. If your deadline is twelve days away, you’re really close. You must, of course, send the notice of intent to lien if its required in the project’s state, so you have to squeeze it in. If you’re in a state that doesn’t require that notice, however, don’t take the risk. Or, at least, understand that the lien deadline will not budge.
Second, the notice of intent to lien may cause folks to promise you payment in the future, and sometimes, these folks forget the important lesson I wrote about years ago that Promises to Pay Mean Squat To Your Mechanics Lien Deadlines.