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Notice of Intent to Lien (NOI)
What is a Notice of Intent to Lien (NOI)?
A notice of intent to lien (NOI)—sometimes called an intent notice or notice of non-payment—is a legal document that serves as a final warning from a subcontractor or supplier to the property owner, developer, or general contractor (GC) indicating their intent to file a mechanic’s lien against the property in the event of non-payment.
The purpose of an NOI is two-fold: First, it protects the subcontractor’s or supplier's rights to establish a legal claim against the property, allowing them to file a lien—or pursue legal action—if the outstanding payment is not made within a specific time frame. Second, it motivates the responsible party (i.e., property owner, developer, or GC) to settle the outstanding payment(s). This is because once a mechanic’s lien is filed, the property owner can’t sell or refinance the property until the debt is settled.
Currently, NOIs are only legally required in nine states:
- Arkansas (10 days before filing lien)
- Colorado (10 days before filing lien)
- Connecticut (Within 90 day lien period)
- Louisiana (material suppliers on residential projects 10 days before filing lien)
- Missouri (10 days before filing lien)
- North Dakota (15 days before filing lien)
- Pennsylvania (30 days before filing lien)
- Wisconsin (30 days before filing lien)
- Wyoming (10 days before filing lien)
However, regardless of state requirements, sending NOIs can be a beneficial and inexpensive step that increases subcontractors’ chances of getting paid (ideally without actually having to file a lien). Note that subcontractors must first submit a pre-lien (or preliminary) notice before submitting an NOI. Making both of these a standard part of accounting processes for past-due payments can improve A/R collection processes—and get payments in the door faster.
Along this vein, Siteline empowers subcontractors by providing visibility into outstanding payments across all projects, alerting them when it's time to pursue overdue balances—or issue an NOI for the most persistent cases.
To experience how Siteline can help your subcontracting business proactively manage payment processes, leverage NOIs when necessary, and accelerate cash flow, book a personalized demo today.
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Other construction terms
What is Floating the Project?
"Floating the Project" in the construction industry refers to a project management technique concerning the manipulation of the project schedule. This term refers to the amount of time that you can delay a task, activity or a group of activities without causing an overall delay to the project schedule. It helps to understand and manage the flexibility you have on different parts of the project. In construction, adjusting the time frame of a floating project must be done carefully to ensure it doesn't impact other interlinked tasks. Good understanding and strategic use of float time can potentially save costs and ensure effective project delivery.
What is an Automated Clearing House (ACH)?
An Automated Clearing House (ACH) within the construction context refers to an electronic fund transfer system primarily used for direct deposit payments, including for construction services. It's a method universally used by many businesses in the industry for its convenience and speed. This system provides an efficient platform for moving funds from one account to another in a collective and prioritised manner, aiding greatly in the financial management of a construction project, including payroll and paying suppliers. The benefits include prompt payment, less risk of cheque fraud, and streamlined bookkeeping. It's an integral part of the financial mechanism in the construction industry.
What is Overhead?
Overhead, in the context of the construction industry, refers to the general, ongoing expenses associated with managing a construction company or project that cannot be directly linked to individual construction jobs or projects. These expenses can include administrative costs such as office rentals, utility costs, support staff salaries, and costs associated with legal compliance, insurance, and marketing. Overhead also includes costs associated with maintaining and repairing equipment, employee training, travel expenses, and team benefits. These costs are necessary for the business operation but do not contribute directly to a specific project’s profit. A proper understanding and efficient management of overhead costs are essential to maintaining business profitability and competitiveness.
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