In the Florida construction industry, contractors face a myriad of challenges and complexities. One often overlooked but critical aspect of the construction process is the Notice of Commencement (NOC). This document may seem like routine paperwork, but for Florida contractors, it is essential for protecting their rights and ensuring smooth project execution. In this blog post, we will delve into three key reasons why contractors should care about NOCs.
- Essential Information for Pre-Lien Notices:
One of the primary reasons contractors in Florida should pay close attention to Notices of Commencement is that they provide the crucial information necessary for serving required pre-lien notices, such as the Notice to Owner (NTO). The NTO is a statutory notice designed to inform the property owner of the subcontractor’s or supplier’s involvement in the project. Without a valid NTO, a sub-tier’s lien rights may be jeopardized.
The NOC acts as a key reference point for contractors, offering details about the property owner, general contractor, and other parties involved in the construction project. By obtaining and reviewing the NOC early in the process, contractors can ensure they have accurate information to serve timely and valid pre-lien notices, safeguarding their lien rights throughout the project.
- “Relation Back” of Lien Rights:
In the expensive world of construction, it is not uncommon for owners to take out a loan, or multiple loans, on a property while a project is ongoing. The concept of “relation back” provided by Notices of Commencement becomes crucial in such situations. This legal doctrine allows a contractor to maintain their lien priority even if the property’s title has been encumbered by someone else, such as a lender.
To ensure the advantage of this “relation back” priority, it is important for contractors to ensure that the owner has recorded a properly completed NOC before starting work. By doing so, they can establish a priority position for their lien rights, offering a layer of protection in the event they are not paid, resulting in a foreclosure lawsuit.
- Information for Recording Liens:
Notices of Commencement are not just about initial project information; they also provide the necessary details for contractors to record their liens. The NOC typically includes specifics about the property, the project’s location, and other vital information required for accurately documenting a contractor’s lien. Additionally, contractors are usually entitled to rely on this information provided by the owner when recording their lien.
Before committing significant time, resources, and effort to a construction project, contractors should obtain and thoroughly review the NOC. Confirming that the information aligns with the project’s scope and understanding the expiration date of the NOC is crucial. An expired NOC can lead to complications in the recording process and potentially jeopardize the contractor’s priority lien rights.
DISCLAIMER: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
READY LEGAL 