The Five states that require a Notice of Commencement to be filed before a construction project can begin are; Michigan, Iowa, Florida, Georgia and Ohio.
What you Need to Know About Michigan
In Michigan, this document must be filed with the registrar of deeds in the county where the project is physically located. Other states have similar rules, but you must confirm the process and procedures for each jurisdiction before proceeding.
The Notice of Commencement Must Also Be Posted At The Project Worksite
In addition to filing the document, the Notice of Commencement must also be posted at the project worksite. The Notice of Commencement is an extremely preliminary document, designed to include the most basic of information regarding the project, namely a description of the project itself and contact information for key people involved in the project.
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Where Does the ‘Notice of Furnishing’ Come into the Picture?
In Michigan Notice of Commencement, the detailed information is more than a minor legal requirement. In Michigan and other states requiring one, it assists other involved people and businesses in filing a Notice of Furnishing. This Notice of Furnishing is required for any person or business working on a project that does not have any contact with the owner directly. This essentially means subcontractors.
What Information Does the ‘Notice of Commencement’ include?
The Notice of Commencement contains much of the information needed for the filing. These notices, considered together, provide basic information for both the owner designee (the representative of the owner) and general contractor as a basic schedule of who is working on the project, defining the scope of work, and relevant contact information for all parties.
The Importance of Reviewing the Notice of Commencement
Sometimes, a visit to the project worksite is impracticable, but you still need to review the Notice of Commencement. In this case, you can request a copy of the notice from the owner or owner designee, but that request should be in writing and sent via certified mail. Upon receipt of this request, the owner or owner designee is required to respond within 10 days by sending both the Notice of Commencement and a blank template for your Notice of Furnishing. If dealing with the owner is problematic for any reason, you can also request these documents from the Registrar of Deeds where the notice was initially filed, namely in the county where the project is located. Some counties are rather advanced technologically, meaning that in some places, these documents can be found online. Others are less advanced, requiring a personal visit to their offices.
These methods should allow you to obtain a copy of the Notice of Commencement. But what happens when these ‘easy ways’ fail to work and you’re left without the document you need. Some projects are managed perfectly, making every document available and easy. Others can make this kind of simple task more difficult. The Notice of Commencement is required under Michigan law, but sometimes, a general contractor or owner may have these kinds of requirements slip through the cracks.
The Notice of Furnishing Under Michigan Law
Under Michigan law, the Notice of Furnishing is required within 20 days of the date when the subcontractor started work on the project. An owner’s failure to post or file a Notice of Commencement, however, changes this deadline. Under Sec. 108(10) of Michigan’s lien statute provides a rule for the exception: if an owner doesn’t file a Notice of Commencement, the subcontractor does not need to send a Notice of Furnishing “until 20 days after the notice of commencement has been recorded.”
What Can Be Done If You Fail to Obtain the Notice of Commencement
If you have tried to locate the Notice of Commencement and been unable to do so, the best course of action for a subcontractor is to simply continue as if one was properly filed. You should send your Notice of Furnishings as best you possibly can, indicating the reasons for any incompleteness. Sending in this Notice of Furnishing, even if incomplete, will help protect your rights regarding a lien in the future. Additionally, by submitting the notice, you will be indicating the date in which your work began, which can be vitally important when it comes to deadlines. You’ve already been exposed to the fact that the project isn’t handling their paperwork professionally, so it’s a great idea to manage your own paperwork so that you can get paid on time and protect any other rights you may have. Your own Notice of Furnishing is what protects your rights, specifically your right to get paid via a mechanic’s lien, not the Notice of Commencement.
Paperwork is a Part of the Business
Anyone that has worked in construction before knows that the required forms, contracts, timelines and other bureaucratic aspects make something that should be simple into something far too complex for the average subcontractor. You know how to build things. You are not a lawyer. And yet, many of these requirements force you to act like one. Making these problems even worse is the fact that the specific rules vary from jurisdiction to jurisdiction, so you should make yourself especially aware of the rules and requirements in your location and the location of the project.
How to Truly Succeed in the Construction Industry
If you want to truly succeed in the construction industry, you need to consider your legal rights as to every relationship you have. You should make sure to establish internal business procedures to document everything in case issues with the project come up. These procedures will help you document the relationship and meet every deadline you agreed to. The Michigan Notice of Commencement is one element of these practices, but it is a very important one in some states and should never be ignored.
This blog is for educational purposes only and not intended for legal advice.