In many states, if the property owner doesn’t know your company is working on a project, you may not have the right to lien. And since it’s impossible for the law to know when a property owner does or does know a fact, laws around the country require contractors of various tiers to “notify” the property owner in writing that they have begun work.
This is called a preliminary notice or notice to owner (NTO). Simply put, it is a written document usually sent certified mail return receipt requested that formally notifies the property owner and any higher tiered contractors that your company is on the project and that you expect to get paid.
In the event you’re unpaid, and you gave the required notice, the property owner and/or upper tiered contractors may be liable to pay you directly (after you file a lien).
If you don’t deliver the required notice, you’re largely out of luck, and you can only pursue payment from the person you directly contracted with.
That’s a very, very general overview of how preliminary notices work across the country. It gets sticky when you look into the details of each state, however, as every state has different notice requirements and deadlines.
Zlien has great free resources for contractors, subcontractors, equipment lessors and suppliers looking for some clarity on whether notices are required and when they must be delivered. Check out their free “Lien Law Punchlists,” organized by states. They also have a “National State-By-State Lien Law and Deadline” publication.
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