By Benjamin D. Johnson, Esq.
Bennett Tueller Johnson & Deere
For contractors and suppliers entitled to file construction liens, one of the most significant changes to the lien laws in 2011 was the implementation of stricter requirements for filing preliminary notices. For all private projects commencing on or after August 1, 2011, to maintain construction lien rights, payment bond rights and bond related claims against project owners, a contractor or supplier must file a preliminary notice with the State Construction Registry within 20 days of commencing its own work on a project. Note, however, that this time period is shortened if a notice of completion is filed on a project. If a notice of completion is filed on a project, all preliminary notices must be filed within 10 days of the notice of completion.
A contractor that does not file a preliminary notice with the State Construction Registry will lose the right to: (1) file a construction lien, (2) make a claim on a payment bond, and (3) make a claim against an owner for failing to obtain a payment bond.
Note, however, that late preliminary notices can be filed, but they will only be applicable for work performed five days after the late preliminary notice is filed. This means that your company could file a construction lien or make a claim on a payment bond but only for work performed five days after the late preliminary notice was filed.
Lastly, although the requirements for public projects are slightly different, and a few loopholes and exceptions remain, generally you will lose your bond rights on public projects if a preliminary notice is not filed.