Every state has its own rules and requirements regarding recording a valid mechanics lien. Usually, serving a preliminary notice at the beginning of a project is the first important step you must do to ensure that you are allowed to file a mechanics lien.
However, some states like North Dakota do not necessarily have the same preliminary notice requirement. Other than a Notice of Intent to Lien, which must be served when payment issues have already cropped up, a regular preliminary notice in North Dakota is optional.
The optional preliminary notice in North Dakota is still important, especially for parties who have no direct contract with a property owner. This guide explains how you can serve an effective preliminary notice in North Dakota to ensure that you maximize your lien rights.
Who must serve a preliminary notice in North Dakota?
No construction participant is required to serve a typical preliminary notice in North Dakota. The only notice that you must serve prior to recording a mechanics lien is a Notice of Intent, but this notice is not the same as a regular preliminary notice that is usually served at the beginning of a project to preserve one’s lien rights.
Why serve a North Dakota preliminary notice?
Even though serving a preliminary notice is technically not mandatory in North Dakota, there are still benefits to doing so, especially if you are a subcontractor or a supplier who has no direct contractual relationship with the property owner.
Here are some reasons why you are encouraged to serve the optional North Dakota preliminary notice:
1. You can notify the property owner that you are part of the project.
Being “visible” in a construction project is very important, particularly when it comes to ensuring that you get paid. Property owners in large-scale projects may have difficulty tracking which parties are working on their site, and you can catch their attention right at the beginning of a project simply by serving them a preliminary notice.
2. You can ask the property owner to withhold payment from the general contractor.
In North Dakota, you can write the owner a preliminary notice telling them to withhold payment from the general contractor or pay you directly. Serving a North Dakota preliminary notice is, therefore, one way to elevate payment issues and communicate them straight to the property owner.
3. You can speed up the payment process.
It is easier for property owners to know whether you get paid or not if they are aware that you are part of the project. If you serve a preliminary notice, it can potentially get you paid quicker because property owners know who you are and will likely keep an eye out to ensure that you do not file a mechanics lien against them.
When do you serve a North Dakota preliminary notice?
You may serve a North Dakota preliminary notice before you record a mechanics lien. This can be at the beginning of a project or after you have completed your work.
What happens if you fail to serve a North Dakota preliminary notice?
Because a North Dakota preliminary notice is only optional and not mandatory, there are no lien-related consequences for failing to serve one on the property owner.
How to serve a North Dakota preliminary notice
1. Prepare the North Dakota preliminary notice form
The North Dakota preliminary notice may include the following details:
- Your name and address
- The name and address of the property owner
- The name and address of the party who hired you
- A description of the property sufficiently accurate to identify it
You may also include a statement mentioning the possibility of filing a mechanics lien if you do not get paid for your work. If you are writing the preliminary notice to get the property owner to withhold funds from the general contractor, you should include an itemized account of your claim and the total amount owed.
2. Serve the preliminary notice
Serving a preliminary notice in North Dakota may be sent by certified mail or certified mail with return receipt requested. These methods are the most reliable because they provide you with a way to track your notice; however, other methods such as personal delivery to the property owner may be sufficient.
Keep in mind that you may serve a North Dakota preliminary notice at any time before you record a mechanics lien. Preliminary notices in other states are usually served at the beginning of a project, so you may want to serve a preliminary notice in North Dakota within the first few days of starting your work.
Best practices for serving a North Dakota preliminary notice
1. Serve a preliminary notice even if you are not required to do so
A North Dakota preliminary notice is only an optional notice. However, serving a preliminary notice is a very effective way to be “visible” in a project and to get the property owners to know who you are. A preliminary notice can potentially get you paid quicker, and it can also be used to elevate payment disputes to the owner by getting them to withhold funds from the general contractor.
2. Remember that a Notice of Intent to Lien is required in North Dakota
While a regular preliminary notice is not mandatory in North Dakota, a Notice of Intent to Lien must be served on the property owner prior to recording a mechanics lien. A Notice of Intent to Lien is delivered when you are ready to record a mechanics lien after payment negotiations fall through.
3. File a North Dakota mechanics lien if payment issues remain unresolved
Serving on the owner a Notice of Intent to Lien may be enough to get them to release your payment. However, if payment issues persist, you should consider filing a North Dakota mechanics lien. Recording a mechanics lien raises an alarm to property owners, and it is often the most effective way to convince them to finally settle any outstanding payment debt.
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