AMENDED PRELIMINARY NOTICE

When you prepare and mail a PRELIMINARY NOTICE, you are required to give a reasonable estimate of the value of the labor and/or materials that you intend to incorporate into the work of improvement.

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AMENDED PRELIMINARY NOTICE

When you prepare and mail a PRELIMINARY NOTICE, you are required to give a reasonable estimate of the value of the labor and/or materials that you intend to incorporate into the work of improvement.

Providing a reasonable estimate of your labor and materials is a statutory requirement that is one of the many factors necessary to give you the right to record and perfect a MECHANIC’S LIEN against a private work of improvement.

There is no hard fast rule as to what constitutes a reasonable estimate of the labor and/or materials supplied to a given project. The entire purpose of giving a reasonable estimate of the labor and/or materials to be supplied to a project is to give the owner some form of notification as to the value of the labor and/or materials that you are going to supply to a particular project. Failing to give a reasonable estimate or giving an unreasonable estimate of the labor and/or materials you intend to supply to a work of improvement, can give the owner of the property a legal argument that your MECHANIC’S LIEN should not be enforced because the owner was not properly notified as to the value of the labor and/or materials that you intended to supply to the project..

The courts have historically given a very liberal interpretation to the meaning of reasonable estimate. The law does not require you prepare and mail an AMENDED PRELIMINARY NOTICE, when the value of your labor and/or materials exceeds the estimate that you placed on your original PRELIMINARY NOTICE. Despite the fact that there is no provision in the law that requires the preparation and mailing of an AMENDED PRELIMINARY NOTICE, there has been some instances where a court has sided with a property owner and ruled that a PRELIMINARY NOTICE is not sufficient when the estimate of the labor and/or materials to be incorporated into the project is not reasonable or is woefully different then the estimate provided on the original PRELIMINARY NOTICE.

Given the possibility that a court could make a determination that your initial estimate is not reasonable, it is cheap insurance to simply prepare and mail an AMENDED PRELIMINARY NOTICE, when the value of the labor and/or services you are providing to a project dramatically increases. There is no hard fast rule as to what constitutes a dramatic increase in the value of the labor and/or materials that one provides to a project. For example if your estimate was $20,000 and your contract increased by 20% to $24,000, I would not think that a 20% increase was dramatic enough to warrant preparing and mailing an AMENDED PRELIMINARY NOTICE. On the other hand if your estimated contract was $1,000,000 and the contract was increased by 20%, to $1,200,000, a $200,000 change might be significant enough to warrant preparing and mailing an AMENDED PRELIMINARY NOTICE.

If you have questions as to whether or not you should do an AMENDED PRELIMINARY NOTICE, please contact your attorney or contact attorney Beard Hobbs a 619-698-0977.