A notice of intent to lien (NOI) – sometimes called an intent notice or notice of non-payment – warns the property owner, prime contractor and/or other party that a mechanics lien or bond claim will be filed unless payment of overdue amounts is made within a certain period of time (i.e. 10 days). Although only legally required in a few states, there are benefits to sending these notices for projects in any state, as they are inexpensive and very effective at producing payment.
In some states and scenarios on private construction projects, notices of intent must be sent before a party is allowed to file a mechanics lien. There are no notice of intent requirements on state, federal, and other public works. The states requiring these notices are listed here:
- North Dakota
Although notices of intent to lien are formally required in only 10 states, there are proven benefits to sending these notices on other accounts with an unpaid balance. In many ways, a notice of intent to lien can be a replacement for a demand letter or dunning letter, except that NOIs have the extra benefit of being relevant to parties other than the debtor and carry more overall weight. This results in demanding more attention and producing more success.
According to zlien research, 47% of NOIs produce payment within just twenty days of delivery – all without any further collection efforts or legal action. Many zlien users have watched that success number increase to over 90% when examining a longer post-notice period, such as 90 days.
The notice of intent to lien tool is a perfect pressure release valve for the construction industry, which is notorious for payment abuses, delays, and working capital challenges. A recent survey by Construction Enquirer of more than 900 subcontracting firms found that more than half (50.4%) said they had to recently resort to legal action to get their bills paid. That’s an enormous statistic. And the success of notice of intent to lien claims appears to be a perfect anti-dote to the industry’s payment woes.
Additionally, notices of intent to lien delivers can salvage important business relationships that are at risk. It’s common that delayed payment or non-payment is related to a communication problem on the project, or something simple. A properly delivered notice of intent to lien document notifies key project stakeholders of a payment problem they may not otherwise know exists, and gives all parties an opportunity to resolve the problem before a more adversarial lien claim is filed.
zlien makes sending Notice of Intent to Lien documents easy. We routinely deliver thousands of NOIs on construction projects across the country. Further, zlien NOIs are engineered to succeed at producing payment and encouraging critical communication, which explains why users who implement and execute a NOI policy through zlien’s platform commonly see payment success on NOIs in a vast majority of deliveries.