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When filling out a prelim do I enter the estimated contract amount since we do not know what the final amount will be yet?
We needed to clarify whether the amount of the contract that we put on the preliminary notice is a binding amount, or whether it is just an estimate and the lien (if any needed to be filed) would be on the amount of the invoices in question.
3 replies
Feb 28, 2020
Montana preliminary notices don't seem to require an estimated contract amount in order to be valid and preserve the right to lien, according to sections § 71-3-531 and § 71-3-532 of the state's mechanics lien statute. So, because that's not a part of the form that's statutorily required, then that amount shouldn't be binding on a prospective lien claimant. Rather than the amount featured on a Montana preliminary notice, a Montana mechanics lien claimant would generally be entitled to file a mechanics lien on all amounts they're owed but unpaid for the improvement of the property.
Generally, though, any time an estimate is required to appear on a preliminary notice, it's understood that the estimate is just that - an estimation. And, relatively small variations in the estimate and price actually being charged shouldn't be particularly consequential. Though, in a state like Arizona, a revised notice could be required when work substantially exceeds the original estimate.
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Feb 28, 2020
Thank you Matthew. We also do business in Idaho, Wyoming, Utah, and New York. Can you please apply the question to these states as well?
Thank you!
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Mar 2, 2020
Idaho and New York do not require preliminary notices before filing a mechanics lien. So, for those states, any preliminary notice would be voluntary and amounts wouldn't need to appear on the notice.
In Wyoming, does not appear that preliminary notices must include the estimated price/contract amount for the work for public or private construction projects.
Finally, from what I can tell, it doesn't appear that Utah requires that an estimated price/contract amount is required on preliminary notices, either.