What is a Notice of Commencement?
Chapter 713 of the Florida Statutes covers construction liens, or mechanic's liens. This law has certain requirements specified that protect contractors, subcontractors, sub-subcontractors and suppliers with provisions for timely payment and for enforcing liens on property in the event of non-payment. There are also safeguards for property owners from having to pay more than once for work or supplies. A crucial document found in this statute is the Notice of Commencement.
What is the Purpose?
The purposes of the Notice of Commencement are to signify the start of project and to provide basic contact information for the property owner, contractor, lender and about the surety. A Notice of Commencement is often a necessary document in order to obtain a building permit in Broward County.
It acts as notification to all contractors, subcontractors, sub-subcontractors, laborers and materialmen that the work will start on the project. A Notice of Commencement is an important tool that helps to prevent the owner from being required to pay more than once for work and helps to ensure suppliers and subcontractors are paid.
At the beginning of a project, owners must sign a Notice of Commencement, stating that they are the owner; list their contact information, give the legal description of the property, state the contractor's name and address, state surety information, identify the lender, describe the work being done and provide an expiration date of the Notice of Commencement. The document also allows the owner to appoint a designee who receives lien-related documents and notices.
The Notice of Commencement is recorded in public records and must be posted at the job site. It lists all the information necessary for workers needing to complete a Notice to Owner. Any potential lienor should serve a Notice to Owner to secure their right to enforce a lien. Correspondingly, property owners are advised to get a written lien release waiver each time a payment is made to the contractor.
If there is no Notice of Commencement posted or recorded, subcontractors or sub-subcontractors, who have not received full payment, can face challenges getting the appropriate information needed to file a mechanic's lien. Florida's mechanic's lien law allows certain individuals involved with the project to enforce their claim against the owner if they do not receive payment for services or materials. The potential result is the sale of the property, against the wishes of the owner, to pay the lienors.
Is a Notice Required?
The property owner or property owner's agent is the one who must file the Notice of Commencement. Florida law states that a Notice of Commencement must be submitted to the clerk's office in order to apply for a building permit with contracts having a value greater than $2,500. The exception is for permits related to the repair or replacement of heating and air-conditioning systems. In this case, the document is needed if the contract value is greater than $7,500. The Notice of Commencement is recorded in the county's property records prior to any permit inspections.
A Notice of Commencement is a key document involved with construction projects. Not only is it beneficial to those participating in the project, in many situations, it is often required. The Notice of Commencement is especially helpful to contractors, subcontractors, sub-subcontractors and material suppliers who may need the information on this document to complete a Notice to Owner to ensure they receive payment.
In Broward County, A Hollywood or Fort Lauderdale mechanic's lien attorney can answer all of your questions about Florida's construction lien laws and the Notice of Commencement.