A Notice of Intent to Lien (NOI) is a formal document sent by a contractor, subcontractor, or supplier to notify a property owner, general contractor, or other stakeholders that they intend to file a mechanic’s lien if payment is not made for services or materials provided. This notice serves as a warning before legal action is taken and can prompt faster resolution of unpaid invoices without the need for litigation.
1. Purpose of a Notice of Intent to Lien
A Notice of Intent to Lien acts as a final demand for payment before a lien is officially recorded against a property. It:
- Alerts property owners and contractors of outstanding payments
- Encourages resolution before a lien is filed
- Provides an opportunity to avoid legal disputes and project delays
In some states, sending an NOI is a legal requirement before filing a mechanic’s lien, while in others, it is an optional but effective step in the debt collection process.
2. When Is a Notice of Intent to Lien Used?
A Notice of Intent to Lien is typically used in construction projects where a contractor, subcontractor, or material supplier has provided services or goods but has not received payment. It is commonly used when:
- Payments are delayed or disputed
- The party responsible for payment is unresponsive
- The sender wants to avoid taking immediate legal action
3. Key Components of a Notice of Intent to Lien
An NOI should contain the following details:
- Names of involved parties (contractor, property owner, general contractor)
- Property description (address and project details)
- Unpaid amount and description of work performed or materials supplied
- Deadline for payment before a lien is filed
- Legal references (if required by state law)
- Sender’s signature and contact information
Most NOIs give the recipient a final deadline (e.g., 10-30 days) to settle the debt before the lien process begins.
4. How a Notice of Intent to Lien Works
- Prepare the NOI: The contractor or supplier drafts the document with all necessary details.
- Send the Notice: The NOI is typically sent via certified mail or delivered in accordance with state laws.
- Await Response: The property owner or contractor has a set number of days to make payment.
- File a Mechanic’s Lien (if needed): If payment is still not received, the unpaid party can proceed with filing a lien against the property.
5. Legal Considerations and State Requirements
- Some states mandate an NOI before a mechanic’s lien can be filed.
- Failing to send an NOI (where required) may result in the inability to file a lien later.
- Even in states where an NOI is not required, sending one can demonstrate a good faith effort to resolve the issue before legal action.
6. Final Thoughts
A Notice of Intent to Lien is an effective tool to recover unpaid construction-related debts and prevent costly legal disputes. Whether required by law or used as a precautionary measure, sending an NOI can encourage prompt payment and protect the financial interests of contractors, subcontractors, and suppliers. If payments remain unresolved, legal professionals can help navigate the next steps, including filing a mechanic’s lien or pursuing legal action.
