Published on October 9, 2014
1. 5 Reasons to Drop the Demand Letter and go with the Notice of Intent to Lien
2. 1. Demand Letters are TOOTHLESS Demand letters are easy to ignore. They're not much different from an email reminding your customer to respond to that invoice of yours that's been sitting on his desk.
3. 2. Demand Letters are NOT INDUSTRY- SPECIFIC A demand letter is a one-size-fits-all document. Whether you're sending it to a prime contractor to demand payment for laying foundation, or to your neighbor to ask for babysitting money you're owed, all demand letters are the same. The Notice of Intent to Lien (NOI) is industry-specific, and industry- specific tools are more effective. They show that you're informed, that you're equipped, and that you mean business.
4. 3. NOIs Threaten IMMEDIATE AND TANGIBLE Action A Notice of Intent to Lien lays out specific and timely follow-up actions. If you are not paid, then you will file a mechanics lien. As such, an NOI can also help your customer avoid a lien. It is a warning (rather than a demand), albeit a warning with specific consequences.
5. 4. NOIs Involve EVERYONE on the Project When somebody files a mechanics lien, it involves the property owner, the project lender, and likely the general contractor. As a Notice of Intent to Lien does exactly what its name says, it's more effective than a demand letter at encouraging your customer to pay. Your customer won't want to be responsible for a mechanics lien being filed, and they certainly won't want to explain to the property owner why that happened.
6. 5. NUMBERS Don't Lie The research is in. According to a recent survey conducted by zlien, nearly half of all NOIs sent secured payment within 20 days of delivery. Compare that to demand letters, which rarely return payment without further legal negotiations.
7. Learn More
Webinar: 5 Reasons a Notice of Intent to Lien Is More Effective Than a Demand Letter
In the construction industry, a demand letter for payment lacks teeth. A better way to secure payment is by sending a Notice of Intent to Lien.
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