3 Frequently Asked Questions About Filing the Notice of Commencement in Florida

When it comes to the filing of the Notice of Commencement in Florida, there are a number of questions that come up most frequently. For general contractors and subcontractors, it’s important to understand the protection that the NOC offers. And for all involved parties, the Notice of Termination has a critical part to play in the ending of the Notice of Commencement, which also has implications for parties involved in the project.

How does the Notice of Commencement protect general contractors in Florida?

The Notice of Commencement benefits general contractors in much the same way as it benefits property owners. Importantly, the NOC designated the start date of the project, posing a strict deadline for the notice requirements that need to be sent by material suppliers and subcontractors. And, if payment issues arise in the future, the general contractor in Florida will only need to deal with the mechanics lien claims of parties that have met the pre-lien notice deadlines.  

This would be an issue in the case where a subcontractor leaves the project before completion without settling their dollar-outstanding money (Outstandings) with sub-subcontractors and equipment suppliers. If sub-subcontractors and other project participants had not submitted their pre-lien notices before the deadline, this would have the effect of rendering their mechanics lien-claims null and void. This would mean the general contractor would not be liable for any of the debts that were incurred by the subcontractor.

 

Why is the Notice of Commencement important for material suppliers and subcontractors?

The NOC has an impact on potential lien claimants for all parties down the contracting chain from the subcontractor, sub-subcontractor and more. In addition to its other important roles, the NOC contains almost all of the information that will be needed if pre-lien notices need to be filed.  Specifically, the mechanics lien itself is found on the Notice of Commencement.

The Notice of Commencement also contains the names of the property owners along with their contact information. So, in the case of filing a mechanics lien, these parties will need to be served and having the correct information is important. 

The NOC also contains the official starting date of the project. This date forms the base from which preliminary notice deadlines can be calculated as knowing when to issue pre-lien notices is critical for protecting lien rights. 

Payment issues come up regularly in the construction industry, so a carefully planned timetable for potential mechanics lien-claims is a good precautionary step.

 

Is it possible to terminate a Notice of Commencement and how is it done?

In Florida the Notice of Commencement can be terminated. This happens when a property owner experiences financial issues, or in the situation where they wish to terminate all, or in some cases, part of the construction. 

If an NOC is to be terminated, the property owner will need to:

• File a Notice of Termination including the same information that was included on the NOC
• Specify the date when the commencement notice will be effectively terminated in the Notice of Termination
• State clearly in the Notice of Termination that all claimants have been paid in full
• Serve copies of the Notice of Termination to the general contactor and all other claimants before the Notice of Termination is recorded.

For a full understand of the process for terminating the Notice of Commencement in Florida is available on Section 713.132 of the Florida Statutes.

 

Contractors Reporting Services in Tampa, Florida offers help for property owners and general contractors by providing assistance with the paperwork allowing their clients to focus on getting the job done.

The next post was first published on 3 Frequently Asked Questions About Filing the Notice of Commencement in Florida and is republished from Contractors Reporting Services. Read more on:} Contractors Reporting Services Blog