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Filing a Mechanics Lien Without a Preliminary Notice – Is it Possible?
Did you miss sending a Preliminary Notice on your Florida construction project? Don't panic! Filing a Mechanics Lien might still be an option. Let's understand the Florida's lien laws and see how to get paid.
When working on a construction project, you interact with project owners. While some owners are prompt in paying for the labor, materials, and services you provide, some take time, and some even end up not paying the agreed amount. To ensure your payments are secured, it is strongly recommended that you always send a preliminary notice to the property owner for every project you take up.
Of course, there can be situations where you may have yet to send preliminary notice but need to file a Mechanics lien. What would you do in that case? Is it possible to file a mechanics lien without sending a preliminary notice? Read on to find out the answer to this critical question.
What is a Preliminary Notice?
In simple words, a preliminary notice can be described as a contract sent by contractors, subcontractors, materials providers, etc., to the property owner or the general contractor in charge of any construction project. The notice informs the owner/general contractor that in case of nonpayment, they are reserving their right to file a Mechanics lien. It is a type of legal protection every state provides to contractors and others involved to exercise their right of payment through a Mechanics lien
A Preliminary notice also known as a Notice to Owner (NTO) is a legal document that lets the owner, general contractor, and other recipients on the Notice of Commencement of a construction project know that a contractor, sub-contractor, materials provider, or other party is furnishing labor and/or material and securing their right to file a Mechanics lien in the event they don't get paid.
This notice to owner is not a Mechanics lien, but rather a way to secure the right to file a lien.
Why should you send a Preliminary Notice?
The primary reason to send a preliminary notice and why some states have made it mandatory is because it protects your rights to file a Mechanics lien on the construction project you are working on. We would say no if you are wondering whether sending a preliminary notice is a compulsion. However, if things do not go well for you and you are facing nonpayment issues, a preliminary notice would help you file a Mechanics lien.
Though filing a mechanics lien is not common, it is the best option for you to exercise to ensure that you are paid for your services on a project.
4 reasons why sending a preliminary notice/Notice to owner (NTO) is important.
- The primary reason to send a preliminary notice/Notice to Owner (NTO) is to secure your lien and/or bond claim rights in the event of nonpayment.
- A preliminary notice/Notice to Owner (NTO) let's your customer know that you are informed of the lien process and want to be paid on your terms, not their terms.
- Sending a preliminary notice is a common business practice.
- This notice is NOT a reflection on the integrity of your contractor or their subcontractors. It is merely a letter informing all parties that you are furnishing labor and/or material to the project.
Is it possible to File a Mechanics Lien Without a Preliminary Notice in Florida?
Yes, in the state of Florida you can file a Mechanics lien for nonpayment if you have a direct agreement (whether verbal or written) with the owner of the property.
However, if you are not working directly for the owner and are a subcontractor, sub-sub, or supplier you are required in the state of Florida to send a preliminary notice/notice to owner to secure your right to lien the property in the event of nonpayment. Remember a notice to owner must be received not sent by the 45day from first furnishing Private Projects.
What are the Preliminary Notice Exceptions?
The rule states that all potential claimants should send a preliminary notice. A claimant is any person who has the right to record a lien claim, serve a stop notice, make a claim against a payment bond, or a combination of any of these. However, there are also some limited statutory exceptions to this rule. The exception depends on whether you work on a public or private project.
Public Projects – If you are working on a public project, you need to be aware of the below two exceptions:
- There is no need for a laborer to send a preliminary notice.
- A claimant having a direct contractual relationship with a direct contractor does not have to send a preliminary notice.
- Only the second and lower-tier subcontractors or materials suppliers must send a preliminary notice when working on public projects.
Private Construction Projects
Private Projects – If you are working on private projects, below are the two exceptions that you be aware of:
- Interior designers, laborers, architects, landscape architects, engineers, surveyors, and mappers are not required to send Florida Notice to Owner forms to secure their lien rights.
- If a construction lender is involved, then the prime contractor should also send the preliminary notice to secure the mechanics lien filing rights.
Public Construction Projects
If you are working on public construction projects, below are the exceptions:
- A claimant having a direct contractual relationship with the contractor holding the bond is not required to send a preliminary notice/notice to owner. That being said, it’s highly recommended to still send your Notice to Owner.
- Best business practices, it is best to send a preliminary notice/notice to owner (NTO) at the beginning of the project to secure your lien rights. Don’t delay!
Best Business Practices for Preliminary Notices in Florida Construction
- Send a Notice to Owner (NTO) on Every Project: Even if not legally required (e.g., if you're a general contractor), sending an NTO proactively establishes clear communication, protects your right to payment, and helps expedite payment.
- Send Notices Early: The legal deadline for sending an NTO is 45 days from first furnishing labor or materials, but you can (and should) send it earlier. Sending the NTO early safeguards your lien rights and demonstrates your professionalism.
- Get the Details Right: Ensure the NTO includes all required information, including accurate names and addresses of all parties involved, a clear description of the work or materials provided, and the property's legal description.
- Follow Delivery Requirements: Send the NTO via certified mail, registered mail, or with a process server to ensure proof of delivery. Retain these delivery receipts for your records.
- Include Warning Language: The NTO must contain the statutory warning language about lien rights as per Fla. Stat. § 713.06(c). This informs the owner of potential lien risks and encourages timely payment.
- Serve All Relevant Parties: In addition to the property owner, serve the NTO on any parties "up the chain," such as the general contractor, the party who hired you, and the owner's designee (if applicable).
For further guidance or assistance with complex situations, consulting experts at SunRay, who specialize in lien laws, is always a smart choice. We offer personalized advice to protect your rights and ensure a successful project outcome. Call us today on 800-403-7660 to get the payment you deserve!
What is the Payment Bond Exception?
Another exception to take note of is the payment bond exception. As per the law, private projects do not require a payment bond, while all public projects require a payment bond. In both types of projects, a preliminary notice is required to avail yourself of the payment bond.
If the preliminary notice is not sent, the claimant can enforce the payment bond by sending a notice to the surety and the bond principal. But this written notice should be sent within 15 days (about 2 weeks) after recording the notice of completion. Suppose the notice of completion has not been recorded. In that case, the claimant should send the written notice within 75 days (about 2 and a half months) of completing the project.
Conclusion
While some states have not made it mandatory, or there are exceptions, the risks associated with not sending preliminary notice are huge. Sending a preliminary notice is one of the best ways to ensure that you file a valid mechanics lien in case of nonpayment. So, if you have not sent your preliminary notice, we recommend you send it now for all your construction projects.
Common Questions Contractors Ask
Is a preliminary notice required in Florida?
Yes, if you're a subcontractor or supplier not under direct contract with the property owner, filing a Notice to Owner (NTO) is essential to preserve your right to file a lien later on.
What is the purpose of a preliminary notice?
A preliminary notice, also known as an NTO, serves to inform the property owner about the parties involved in the project and their potential lien claims. It's a crucial step for subcontractors and suppliers to protect their payment rights.
How many days do I have to file an NTO in Florida?
In Florida, you must serve the Notice to Owner no later than 45 days after the first furnishing of labor, services, or materials to the job site.
Can a contractor file a lien without a Notice to Owner in Florida?
General contractors, those with a direct contract with the property owner, are not required to file a preliminary notice to maintain their lien rights. However, they must provide a list of all subcontractors and suppliers upon request from the property owner.
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