The Notice of Commencement: More Important Than You Might Think

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CONSTRUCTION
PRACTICE GROUP
                                                          Legal Information for the Construction Industry
                                                            June 2015
 



THE NOTICE OF COMMENCEMENT: MORE IMPORTANT THAN YOU MIGHT THINK

Every construction project (should) begin with the recording of a Notice of Commencement. The notice is required to be signed by the owner of the project and recorded in the public records for the county in which the project is located. The notice should also be posted at the job location.

What does it tell you?

The notice typically contains the name and address of the owner, general contractor, surety and lender (if applicable). It may (but really must) contain a copy of any applicable payment and performance bond posted on the project.

Why is it important?

For the owner, any payments made to the contractor after the Notice of Commencement expires are improper and can result in the owner paying twice for the work furnished to the property. In addition, if there is project financing involved, the lender will want to make sure the Notice of Commencement is recorded after the date its mortgage is recorded. This is because a construction lien’s priority with respect to other mortgages/liens relates back to the recording date of the Notice of Commencement. Any interest recorded after that date, is inferior to that of the (timely recorded) construction lien.

For a potential lienor (contractor, subcontractor or supplier) the Notice of Commencement generally contains all the information needed to properly prepare and serve a Notice to Owner and Notice of Non-Payment (provided one is disclosed). A lienor has a right to rely on the accuracy of the information in the notice of Commencement if and when it seeks to record and perfect any lien or bond claim.

It follows then that the notice can also serve to alert a subcontractor or supplier that a payment and/or performance bond has been posted for the job.  In fact, Florida Statutes §713.23 requires that a copy of a payment bond be attached to the Notice of Commencement when it is recorded.[i] Failure to attach a copy of the bond to the Notice of Commencement can lead to problems for the surety/owner. Florida’s Lien Law states that, “if a notice of commencement with the attached bond is not recorded before commencement of construction, the lienor not in privity (in contract) with the contractor may, in the alternative, elect to serve the notice to the contractor up to 45 days after the date the lienor is served with a copy of the bond.”[ii] Thus the failure to attach a copy of the bond to the Notice of Commencement can actually result in giving a lienor a second bite at the proverbial apple.

Conclusion

Always request a copy of the Notice of Commencement from the party you are contracting with or if possible, the general contractor. It is perhaps one of the most important documents to have in a project file. Not only does it contain needed information to prepare a proper Notice to Owner/Contractor, it can also alert you to the existence of a payment bond and the information needed to serve a Notice of Non-Payment should the need arise. When in doubt of what rights you may have to payment on a given project or what you should include in a Notice to Owner/ Contractor or Notice of Non-Payment, always consult with an attorney knowledgeable with Florida’s Lien and Bond Law. 

[i] In fact, pursuant to Florida Statutes §713.245 a project on which a conditional payment bond has been posted (that is a bond in which surety’s obligation is triggered only to the extent the general contractor has been paid by the owner), the notice must list the bond as a conditional bond and attach a copy of it to the recorded notice.
[ii] Florida Statutes 713.23(c)




BY: JOSE A. RODRIGUEZ, ESQ. 
The Soto Law Group, P.A.
2400 E. Commercial Blvd., Suite 400
Fort Lauderdale, FL  33308
jose@sotolawgroup.com
www.sotolawgroup.com
TEL:  954-567-1776
FAX:  954-567-1778























The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience. Additionally, the information above is not intended to be legal advice. Please consult with an experienced lawyer if you have a specific issue or dispute.


Office Locations: 2400 E. Commercial Boulevard, Suite 400, Fort Lauderdale, FL  33308
  2901 Q. Street, NW Suite 2, Washington, D.C. 20007

Comments

  1. Steve FinnellJune 30, 2015 at 10:44 AM

    ARE WE ALL GOD'S CHILDREN? BY STEVE FINNELL

    Are Muslims, Hindus, Christians, Jews, Buddhists, atheists, and all other men, God's children? No, they are not. They are all created by God, but they are not all God's children. God loves them all, but they are not all God's children.

    Who are God's children? Christians are God's children.

    Galatians 3:26-27 For ye are all the children of God by faith in Christ Jesus. 27 For as many of you as have been baptized into Christ have put on Christ. (KJV)

    Men become children of God by faith in Christ Jesus and being baptized into Him.

    John 11-12 He came unto his own, and his own received him not. 12 But as many as received him, to them gave he power to become the sons of God, even to them that believe on his name;(KJV)

    The Jews who rejected Jesus as the Christ were not God's children. Those who believe in Jesus have the opportunity to become God's children.

    GOD LOVES ALL MEN, HOWEVER, SALVATION IS CONDITIONAL.

    Terms to become the children of God.
    A. Faith: John 3:16
    B. Repentance: Acts 2:38, Acts 3:19
    C. Confession: Romans 10:9
    C. Immersion in water: Mark 16:16, Acts 2:38, 1 Peter 3:21.

    All men have the opportunity to become God's children. Galatians 3:28 There is neither Jew nor Greek, there is neither bond nor free, there is neither male nor female: for you all one in Christ Jesus.(KJV)


    ALL MEN ARE NOT GOD'S CHILDREN, HOWEVER, THEY ALL CAN BE.

    YOU ARE INVITED TO FOLLOW BY BLOG. http://steve-finnell.blogspot.com
    Posted by Steve Finnell at 7:30 AM No comments:
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