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The Importance of Notice of Commencement to Your Lien Rights

The initial step in protecting your right to file a Mechanic’s Lien is to file a Preliminary Notice. This notice may go by one of a number of other names depending on your location, including Notice to Owner or Notice of Furnishing. Without proper notice, you may forfeit your right to lien from the very start.

These notices must be accurate, and the timing of when they must be provided varies from state to state. In some states, information required to complete a preliminary notice is contained in the Notice of Commencement. This notice can be a critical piece in the notice process and taking a shortcut by not requesting it can cost you your right to lien.

Because of its importance, there are some things you should understand about the Notice of Commencement. What is it? Who files it? Is it required? And why is it important to the lien filing process?

What is the Notice of Commencement?

The Notice of Commencement, sometimes called the Notice of Project Commencement, is used to formally declare the start of a project. It is filed by the general contractor (GC) or property owner and can provide some protection to the GC or owner.

In the states that require or offer a Notice of Commencement, the information filed in this document can be vital in filing other notices, like upfront or preliminary notices.

Required and Optional Notice of Commencement Filing

It’s important to note that the Notice of Commencement is required in some states, in others it is optional, while in most states the lien statutes make no mention of a commencement notice. Because there is important information contained in the Notice of Commencement that is required in subsequent notices, if one is required in your state it should be obtained to ensure the accuracy of your filings.

When a Notice of Commencement Impacts Preliminary Notice

A Notice of Commencement can impact a mechanic’s lien. If the notice is required in your state, it’s important to understand the effect it can have on your preliminary notice and the rest of the lien process.

Georgia

The Notice of Commencement is required in the state of Georgia, and subsequent documents are related to it. For those filing a Notice to Contractor – the preliminary notice in Georgia – information from the Notice of Commencement must be included in the document for it to be valid. The entity that filed the Notice of Commencement is required to provide a copy to subcontractors, materialmen, and others in response to a written request.

Florida

The required Notice of Commencement in Florida contains specific information that contractors, sub-contractors, and other interested parties need to send the preliminary notice, known as the Notice to Owner in Florida. Specifically, when sending your preliminary notice, it must be served on everyone listed in the Notice of Commencement as part of the chain of contract. This could potentially include the lender if they are listed.

Michigan

The Notice of Commencement becomes important when serving the preliminary notice – or Notice of Furnishing – in Michigan. The Notice of Furnishing must be sent to the General Contractor and the Owner Designee, both of which are listed in the required Notice of Commencement.

Ohio

As with the other states listed, the Notice of Commencement is required in Ohio and is important when sending out the preliminary notice or Notice of Furnishing. To be valid and preserve your right to lien, the Notice of Furnishing must be sent to the address of the owner or designee listed in the Notice of Commencement.

As mentioned, there are states that allow for a Notice of Commencement without requiring it. While obtaining the notice in states where it is required is important, it’s still nice to have in states where it’s optional. In those states, there is no requirement to use it as part of your upfront notice.

For instance, a commencement notice is not required in New Mexico. However, while not a Notice of Commencement, New Mexico lien law acts similarly in that it allows you to request the information required to be included on your Preliminary Notice from the owner or original contractor.  If it is not supplied it cannot be claimed that a valid preliminary notice was not given.

Obtaining a Notice of Commencement

For states requiring or allowing for a Notice of Commencement, it may be tempting to take a shortcut and skip the step of acquiring it. But due to notice and content requirements of notices, not obtaining a commencement notice in a timely fashion can greatly impact your ability to maintain your right to lien – and your right to get paid.

BICA routinely requests a copy of the Notice of Commencement for its clients to ensure you have all of the information needed to protect your rights. When a preliminary notice is sent, BICA ensures it meets all statutory requirements by first obtaining and then including the information contained in the Notice of Commencement.

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