Preliens and Liens....What Do They Mean?

As a contractor you know how important it is to protect yourself before taking on a contract. In order to do that preliens and liens are often used to make sure that all parties involved are fairly compensated for their work. However, especially if you aren’t in the construction industry, do you know what a prelien or a lien is? 

A prelien is also known - in some states - as a preliminary notice.

This is a document sent by a subcontractor to inform relevant parties of their participation in the project and their right to file a lien if there is an issue of payment, and often include information about the sender, property owner, general contractor, and services or materials provided. 

Timing requirements to send a prelien out vary, so you will have to make sure you are sending out your prelien within the correct timeframe. 

Failure to send out a prelien within the timeframe can limit or forfeit your right as a subcontractor to file a lien and could result in inability to receive the funds you rightly deserve. 

A lien is a legal claim against the property. 

A lien’s purpose is for a contractor, subcontractor, or supplier, to secure payment for their work. A lien can be resolved through payment negotiations, litigation, or bond claims. Once there is a payment or settlement, the lienholder releases the lien with a release of lien document to clear the property title. 

Preliens and liens are important tools for making sure that you get the money you deserve for the work that you did. Make sure you’re getting paid.