The Notice of Intent to Lien is a mysterious document. While 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.
This seems strange at first glance, but perfectly right upon further study, as this blog post discusses.
What Is A Notice Of Intent To Lien?
A Notice of Intent to Lien is a lot like a demand letter. It is a form document sent to certain parties on a construction project warning that if payment isn’t made to the claimant within a certain number of days, the claimant will file a mechanics lien.
A few states require parties send a notice of intent to lien before they file a mechanics lien or bond claim. These states are:
- North Dakota
[pullquote style="right" quote="dark"]It is important to distinguish the notice of intent to lien from the preliminary notice.[/pullquote] 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?
This is a frequently asked question to Zlien. In fact, we wrote an entire blog post dedicated to the question: 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.
A notice of intent to lien is frequently successful because it accomplishes one of the five main effects of a mechanics lien filing: It gets more parties to the table and concerned about your debt.
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, folks forget the important lesson I wrote about years ago that Promises to Pay Mean Squat To Your Mechanics Lien Deadlines.
Okay, are you ready?