Most Florida construction subcontractors and suppliers are aware that they must provide a Notice to Owner and Notice to Contractor (“NTO”) in order to secure their construction lien rights. This document provides interested parties with notice that the potential lienor exists, as required by Florida’s lien law. Failure to provide the NTO on time results in the loss of lien rights.
Whenever a contractor or supplier does not contract directly with the property owner, the NTO must be served before starting work/delivery, or with 45 days of doing so. This deadline provides a fair amount of time for contractors to serve the NTO, especially when there are mailing issues, like failed delivery or re-delivery.
However, there is a common pitfall to be aware of, particularly when a contractor is involved late in a construction project. For example, a landscaping subcontractor may be involved at the tail end of the project, when all work is nearly complete.
Florida Statute 713.06 cuts the 45-day deadline short when two events have occurred:
- The direct contractor has provided the owner with a Contractor’s Final Payment Affidavit; and
- The owner has made final payment to the direct contractor.
The exact wording of the NTO deadline under Florida law is as follows:
“The notice must be served before commencing, or not later than 45 days after commencing, to furnish his or her labor, services, or materials, but, in any event, before the date of the owner’s disbursement of the final payment after the contractor has furnished the affidavit under subparagraph (3)(d)1.”
This means that, even though there is still time to serve the NTO within 45 days of starting, a subcontractor can still miss the deadline and lose its right to claim a lien. This can have dire consequences for subcontractors and suppliers who are not aware of this intricacy.
In order to avoid this pitfall, subcontractors and suppliers should serve their NTO as early as possible; preferably, before providing any work or materials at the project. To be clear, there is no point of being too early to serve a NTO. All parties should take advantage of this flexibility and provide their NTO as early as possible.
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READY LEGAL 