Glossary
Preliminary Notice
A preliminary notice is a written notice that a subcontractor or supplier sends early in a construction project to the owner and others, often required to preserve mechanic's lien or bond rights.
Many states require certain parties on a construction project to send a notice near the start of their work. The names vary: preliminary notice, notice to owner, notice of furnishing, or prelien notice. Whatever it is called, the purpose is to let the property owner, general contractor, and often the construction lender know who is supplying labor or materials, so they can make sure those parties get paid before releasing funds.
The details differ widely by state. Some states require the notice from nearly everyone except those who contract directly with the owner, while others require it only from lower-tier parties. Deadlines are often measured from the first date labor or materials were furnished. For example, California uses a 20-day preliminary notice and Florida uses a notice to owner that generally must be served within 45 days of first furnishing. Some states also require notices on public projects to preserve payment bond rights. The required content, delivery method, and recipients are set by statute, and errors can cost a claimant its rights.
Here is a fictional example. A plumbing supply house, Riverbend Pipe & Fixture, starts delivering to a plumbing subcontractor on a new apartment building. Its office procedure requires sending a preliminary notice for every new job within days of the first delivery, using the owner and lender details from the job information sheet. Months later, when the subcontractor falls behind by $17,600, Riverbend's lien rights are intact because the notice went out on time.
Preliminary notices matter to a creditor because they are often the cheapest and earliest protection available in construction. A notice costs little to send but can preserve lien or bond claims worth far more. Notices also tend to improve payment behavior, because owners and general contractors who know a supplier is on the job often require lien waivers before paying the subcontractor.
Example
Riverbend Pipe & Fixture sends a preliminary notice right after its first delivery. When the plumbing sub falls $17,600 behind, its lien rights are preserved.