When sending preliminary notices, it’s important to have the right form and to follow all statutory requirements in your sending method. An often overlooked aspect of preparing a preliminary notice, however, is doing project research to make sure you’re sending the notice to the right people.
This research and data verification is critical to sending preliminary notice, and you’d be surprised how often your information is wrong.
What You Need To Verify With Every Preliminary Notice
When doing data research and verification about a construction project you are focused on two key concerns: (i) Whether you’re sending the correct form; and (ii) Whether you’re sending your form to the right parties.
Why Data Research Matters To Which Form You Are Sending
Finding a preliminary notice form may seem easy enough, but there are some hidden complications. Preliminary notice forms will obviously change from state-to-state, but they can also change depending on the type of project, your role in the project, and your tier.
[pullquote style="right" quote="dark"]If you send a private notice for a state project, you’re sending the wrong form. A court would likely consider the form as good as not being sent at all.[/pullquote] The most striking form differences occur between private, state and federal projects. These different project types are governed by completely different sets of laws with very, very little overlap.
Within each set of laws (private, state and federal), however, there are still differences. Residential projects sometimes have different forms from commercial projects, and even owner-occupied residential projects require different treatment from ordinary residential projects. In the state context, highway projects are sometimes treated differently from other state public works.
Data research is, therefore, important to determine exactly what type of project you’re working on. Research enables you to choose and send the correct preliminary notice form. Determining if a project is residential or commercial and state or private may seem simple, but you would be surprised how many projects are ambiguous.
Here are some common challenges:
- Apartment and Condominium complexes offer challenges because they can sometimes be considered commercial and other times residential depending on the scope of work
- Many states are engaging in public-private partnerships to build certain centers, and this creates confusion as to whether the project is public or private
- Private companies sometimes lease space from public entities and perform improvements thereon
- Schools and Universities can be public or private depending on their organization
Why Data Research Matters For Who Receives Your Form
Figuring out the project type is the easy part. Once you have your project type and preliminary notice form settled, the next consideration is who exactly should receive the form.
[pullquote style="left" quote="dark"]There are more than a thousand variations of mistakes that can be made when identifying the property owner, the tenant, the general contractor and other parties to a construction project.[/pullquote] I’m not talking about which project participants in the big picture sense are statutorily required to receive the form. I’m talking about which specific people and companies are required to receive the form.
This is a challenge for construction companies because it requires them to determine the identity of parties like the property owner, general contractor, and construction lender when they might not know who these parties are. Frequently, even when these parties are identified to the claimant, the identification was incorrect.
Here are some common issues:
- A party is identified to you as a property owner, but they are actually a tenant who commissioned the work. The notice usually must still go to the property owner and you must do property owner research.
- You must notify the construction lender in states like California, Arizona and Oregon, but the lender isn’t frequently identified to you. You are required, therefore, to research the construction lender’s identity (See How To Find The Lender on California Construction Projects).
- A property owner is identified to you as a person, when it is actually the person’s company that owns the property.
- The property owner is identified to you as a single person, but they are actually married and jointly own the property.
There are more than a thousand variations of mistakes that can be made when identifying the property owner, the tenant, the general contractor and other parties to a construction project. Doing research on the front end is important, and it’s something that should be done with every single preliminary notice sent.
Zlien Helps You Research Preliminary Notice Data
One of my favorite blog posts here is “4 Reasons Its Smart To Outsource Your Preliminary Notice Work.” It’s not just because we offer a preliminary notice service at Zlien. It’s because I really believe in the importance of outsourcing this works. In fact, it’s the reason why I started Zlien 7 years ago and spend hundreds of thousands of dollars building our proprietary software to manage this stuff.
Here is what I had to say in that article under Point #3, “Professional Quality Control:”
Instead of relying on an employee who only prepares and sends these notices sporadically, you’ll have a professional set of eyes taking a look at your data and checking it against available public records databases. It could mean the difference between enforceable lien rights, and no lien rights at all.
Note that it’s the preliminary notice service and outsourcing that does the magic here, and that’s why I’ve always advocated a service over software. Preliminary notice software is a good start for your company, but it’s not a real solution. It leaves you vulnerable to mistakes in data research and verification, and it also costs your company unnecessary time and expense. Read more about why A Preliminary Notices Service Is Better Than Preliminary Notice Software.