Failure to properly compose, file, serve, review, or abide by these notices might be extremely detrimental, to the point where significant legal rights may become unintentionally waived.
Construction projects—especially large ones—usually include the filing or serving of several formal notices throughout, whether required or allowed by contract or statute. Two of the most common and important notices in Florida construction law are notices of commencement and notices to owner / contractor.
Notice of Commencement
A Notice of Commencement (NOC) is required on most residential and commercial projects. It is meant to be prepared and recorded in public records by the property owner, and includes basic and important information about the owner, the contractor, the property, and other people or entities such as authorized representatives, lenders, or sureties, that are involved in the project. Not only is it usually required by the permitting authority, but it also contains vital information for contractors to serve notices to owner / contractor (see below), record claims or lien, or serve a notice of nonpayment on a surety for a payment bond. While many times the contractor is closely involved in the preparation of a notice of commencement, it is critical that the owner actually signs it, as the contractor, as well as subcontractors, sub-subcontractors, material suppliers, and others are legally entitled to rely on the accuracy of this publicly recorded document.
Notice to Owner/Contractor
In order to preserve its lien rights, it is absolutely required that a subcontractor, sub-subcontractor, or material supplier not in a direct contract with the property owner serve a Notice to Owner / Contractor (NTO or NTC) no later than 45 days after the first furnishing labor, services, or materials for the construction improvement of the property. The notice is intended to alert the property owner (and others) as to the presence of the lienor on the project, as well as the fact that the owner needs to take certain precautions to make sure the lienor is paid for work on the property. In addition to the owner and other people or entities designated in the notice of commencement (see above), a lienor must serve the contractor or even subcontractor if the lienor is not in a direct contract with them. Unfortunately, it is often impossible to tell at the beginning of a project if there will be payment problems at the end of a project; but by then it is too late to serve a notice to owner / contractor. It is therefore highly recommended that all lienors required to serve such a notice do so on every project at the very beginning of the project to avoid waiving potentially important lien rights.
For projects where the contractor has procured a statutory payment bond (including public projects), no notice to owner is required, but a notice to contractor is required to be served in the same time frame by any lienor not in direct contract with the contractor. This notice is intended to notify the contractor that the lienor intends to look to the payment bond in the event the lienor is not paid.
Marlowe McNabb Machnik, P.A. can advise you as to your company’s notice to owner / contractor practices, and we can properly prepare and serve a notice to owner / contractor on your behalf.
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