Gaining the benefit of a mechanics lien may, at first glance, seem like a one-step process: simply file a lien after non-payment on a construction project. In many states, however, multiple steps are required to preserve a right to mechanics lien protection. Specifically, in order for a lien to be valid, many states require a lien claimant to first file or deliver a preliminary notice to certain parties involved in the project.
Indiana Preliminary Notice
Under Indiana Mechanics Lien law, all parties not in direct contractual relation with the property owner, and who provided labor or materials to a single or double family Residential Project must provide Preliminary Notice to Owner of Mechanic’s Lien Rights. This notice must be sent within 30 days from first furnishing labor or materials to the project if the project is for the repair or alteration of the residential structure or, if the project is for the original construction of the residence, this notice must be provided within 60 days of first furnishing labor or materials.
In Indiana, pre-lien notice must be sent to the property owner and may be required to be filed in the recorder’s office in the county where the property exists.
In Indiana, pre-lien notice must be sent to the property owner and may be required to be filed in the recorder’s office in the county where the property exists. For the new construction of a spec home, or a home in a subdivision, the notice must be recorded in the recorder’s office in the county in which the project is located, as well as delivered to the property owner. For other projects on which preliminary notice is required, delivering the notice to only the property owner, by certified mail return receipt requested, is sufficient.
Since the notice requirements only exists for materials or work provided on credit, parties providing labor and/or materials that have been pre-paid, or labor and/or materials provided C.O.D., are excepted from Indiana preliminary notice requirements. This obviously makes sense, as labor and/or materials provided under those circumstances would not give rise to an unpaid account or potential mechanics lien to begin with.
When required, a preliminary notice in Indiana must contain two specific pieces of information:
1) The preliminary notice must describe what labor or materials were furnished.
2) The preliminary notice must indicate the existence of lien rights.
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Who Must File Preliminary Notice in Indiana?
all parties not in direct contractual relation with the property owner, and who provided labor or materials to a single or double family Residential Project must provide Preliminary Notice to Owner of Mechanic’s Lien RightsIn Indiana, all parties not in direct contractual relation with the property owner, and who provided labor or materials to a single or double family Residential Project must provide Preliminary Notice to Owner of Mechanic’s Lien Rights. The specific preliminary notice requirements are set forth by Ind. Code Ann. § 32-28-3-1(h) and (i). While the statute is complex and may be difficult to understand (more on this in a later post), it is not the most poorly drafted mechanic’s lien statute I’ve come across, and by no means should it have spawned the amount of confusion that it apparently did for a short time.
However, now that it appears that the confusion has cleared up in the Indiana court system, the plain requirement for which parties to a construction project must send preliminary notice, and to which construction projects the requirements apply, is that parties with no direct contract with the property owner (or owner’s agent) must send preliminary notice on 1 or 2 family residential projects. The deadline by which the preliminary notice must be delivered, and to whom the preliminary notice must be delivered, depends on whether the project is a remodel, or new construction.
