In many cases, the timeline for filing a mechanics lien runs from when you first provided labor or materials to a construction project. This is great if you can accurately pinpoint and document the date you started, but if you don’t keep detailed records, or if someone contests the date, then you may find yourself in a difficult situation.
In some states, this can be solved by using a Notice of Commencement (also called a Notice of Project Commencement or an Affidavit of Commencement). This document is designed to formally set the beginning date of a project or the date on which you first provided materials or labor. The filing of a Notice of Commencement by an owner or prime contractor can impact the deadlines and filing timeline for second tier suppliers and laborers. This can protect the owner because it creates a limit on when a lien can be filed. A lien that is sent late may not be able to attach to the property.
The notice is generally filed right before or shortly after the work on the project begins. Requirements vary by state, so be sure to check the laws of the state you’re in to confirm the details. In most cases, the notice is filed in the county where the project occurs and must sometimes be posted on the project site.
Where is a Notice of Commencement Required?
In Florida, Georgia, Iowa, Michigan, and Ohio a Notice of Commencement must be filed when a project is started in order for you to later file a mechanics lien. Other states, South Carolina, South Dakota, and Texas, offer it as an optional protection that owners and prime contractors can use to limit the filing of mechanics liens after the project is complete.
[A map of the above paragraph might be nice. Maybe with two different colors for required/optional.]
Once the Notice of Commencement is filed, the date on it indicates the official beginning of the project. Deadlines for mechanics liens are then measured based on this date, including deadlines for preliminary notices and lien filings. If you’re working in a state that requires the filing of a Notice of Commencement, you would be wise to obtain a copy for your records and enter the date on the notice into your payment and lien tracking software to make sure you don’t miss any filing deadlines.
What is an Optional Notice of Commencement?
If you’re in one of the three states where filing a Notice of Commencement is optional, it’s still a great practice, especially on larger projects, to file one or to get a copy of the notice filed by the owner or general contractor because it will show you the date the project commences and also the amount of liability the owner or general contractor has. Once the Notice of Commencement is filed, the value of the liens by second and third tier contractors and suppliers is limited. A third tier contractor cannot file a lien for more than the value of what the general contractor owes to the second tier contractor above him.
Another important note in some states, if the owner files a notice of commencement, subcontractors and material suppliers must also file a notice of commencement when they begin work to notify the owner that they’re working on the project and failure to do so could mean forfeiting your ability to file a mechanics lien.
If you want someone to explain the details of the laws in your state, or need help filing a mechanics lien, give the lawyers at National Lien & Bond a call. We’re experienced construction attorneys with knowledge of all 50 states and can help you file the right paperwork and the right time and collect what you’re owed.