Sending pre-liens to clients is a crucial step in the construction process, with some states even requiring them. Here, you’ll find a complete overview of how to explain a pre-lien upfront to your valued customers.

What is a Pre-Lien?

Also known as a “preliminary notice,” a pre-lien is simply a notice sent by contractors or subcontractors at the start of a construction project. Though the exact requirements surrounding pre-liens vary by state law, you’ll generally send them to the property owner, general contractor, and other parties involved with the project.

When they are handled correctly, pre-liens can benefit everyone participating in the construction process. For property owners, pre-liens are an easy way to track the businesses working on a project and how much they’ll need to pay them. The same is true for general contractors, along with the added benefit of simplifying project security management. And subcontractors who make a point of sending pre-liens often find that they receive payment sooner rather than later.

Why a Pre-Lien is Crucial

Of course, there’s a bit more to these documents than the above description implies. Your pre-lien will also function as the first step in resolving any payment disputes that arise on a construction project.

When you send a pre-lien to other organizations involved in an upcoming job, you’re also securing your right to a mechanics lien down the line. Note that this doesn’t mean you’ll have to file a mechanics lien–n fact, doing so is relatively uncommon. Sending a pre-lien simply gives you the option to take that step if anything goes wrong.

While some states allow for late pre-liens after the usual deadline, it’s nearly impossible to file a mechanics lien without a pre-lien. If you do, the other party will easily be able to take you to court.

How to Approach Clients

There’s no arguing that pre-liens are essential, even if you’re working in a state where they aren’t legally required. Despite that, many companies find it difficult to file for a pre-lien – not due to legal red tape, but because they’re concerned about offending their clients. Unfortunately, that’s not an entirely unfounded concern. If you approach this topic the wrong way, your customers could think that you don’t trust them to pay you what they owe.

However, this shouldn’t be an issue when you know how to explain a pre-lien upfront. Follow these steps to secure your payments while keeping your clients happy:

  • Don’t wait to talk about pre-liens. Even when they aren’t put to use, pre-liens play a significant role in all kinds of construction projects. Given their importance, you shouldn’t put this discussion off until the last minute. Instead, tell your clients what pre-liens are and why they are essential as soon as possible.
  • Make sure you get in touch with the right people. A single discussion on the topic of pre-liens might not be enough. Figure out which of your clients’ departments and workers are likely to encounter pre-liens, and tell them what they need to know.
  • Be transparent about why these notices are essential. You don’t need to sugar-coat your discussion. Make it clear why you need pre-liens to protect your business. And explain that it’s a standard requirement across all the clients you work with.
  • Tell your customers how pre-liens can benefit them. Pre-liens don’t just help you, after all. Let your customers know how these notices can be in their best interest, too.

Make It Easy

The reality is, that getting on the same page with clients regarding pre-liens is just the first step. Then comes the process of actually sending pre-liens and other official documents. This can be highly complicated, even for seasoned construction professionals. That’s where Titan Lien Services comes in.

The team at Titan specializes in lien rights to help keep your business safe. They have a quick, free setup with great customer service, no annual fee, and have education about liens per state to help you better understand what you can expect. From pre-liens to mechanics liens, Titan does the heavy lifting so you can get to work faster knowing you’ll get paid.

Leave a Reply

Your email address will not be published.