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FAQ-Notice of Intent to Lien in Construction

Do you have a question about Notice of Intent (NOI) to lien in construction? Or have you recieved one, and would like to understand what this letter is detailing? Then this article is for you.

Our experts at Nationwide Notice have gathered together a few questions that are commonly asked about NOI and liens in constructionn and have answered them.

What is a Notice of Intent to Lien

A notice of intent to lien is not a lien. Rather it is an official notice that you can send to a client that has a payment withstanding that the seem to hace no intention of fulflling. This notice tells the client that there has been an issue with their payment and that if they don't settle this problem , you will file a lien against them.

1. A Mechanic’s Lien Follows a Property
A property owner is unable to make any moves on a property until the lien is settled. This makes the property essentially useless to them unless they plan on living in it. There’s no way they will profit from a property that hasn’t been paid for.

This document is recorded with land records and appears on a title search of the property. The property can’t be sold, refinanced, or transferred in any way until the lien is taken care of.

2. It Gets the Owner’s Attention
Sometimes it’s possible in the construction business that things just slip between the cracks. If you are in the property or real estate business as a buyer or investor, imagine how hectic things can get when you are juggling 10 properties at once.

It’s not uncommon for an owner to simply forget to handle the bill for a construction project. When they receive a notice for a mechanic’s lien, it gets their attention and can lead to prompt payment.

3. Liens Lead to Breach of Contract
When liens are filed in any manner, it can lead to a possible breach of contract. Any smart contractor will have a thorough contract typed up before starting work on any project.

When an owner receives a mechanic’s lien, it means the next step is possible grounds for breach of contract. This means the customer will have almost no chance of their non-payment holding up in court. This is why it’s important to file the proper paperwork in the proper order.

4. It Establishes a Firm Payment Date
Sometimes invoices can take quite some time to be paid in full. Even though there are prompt payment laws, sometimes quick payment doesn’t happen when you need it to.

Filing a mechanic’s lien ensures the property owner understands there is a firm date set for payment. Not adhering to this payment date will lead to a breach of contract and other measures being taken against the property owner.

When you’re in the construction business, not being paid can be very demoralizing. However, having options like a mechanic’s lien can help you in the event of non-payment. Make sure these liens are filed properly, as well as the preliminary notices, and your chances of being compensated become much higher. If you have a construction company and need help with your construction payments, Nationwide Notice can help. As a full and self-service preliminary notice and lien service company, we specialize in getting contractors paid. We partner with companies of all sizes, using existing lien laws as leverage to make sure payments are received on time. We help contractors and subcontractors secure their lien rights while getting the money they deserve. No matter the size of your construction company, we work with you and your state laws to ensure construction payment. Find out more about our services we provide here or check out this page to learn more about who we are and what we do.

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