The Notice of Commencement is a highly important document for Florida property owners as well as the construction professionals who work for them.
In certain states like Florida, filing a Notice of Commencement is a legal requirement for property owners, and failing to do so may result in serious and costly consequences. Without a Notice of Commencement, property owners may end up paying their contractors and material suppliers double.
Contractors, subcontractors, and material suppliers, on the other hand, also benefit from having a Notice of Commencement. It allows them to determine the official start date of a project, and it also shows the other important information that they may need if they ever need to file a Florida mechanics lien.
- What is the Florida Notice of Commencement?
- When is a Florida Notice of Commencement required?
- Why file a Notice of Commencement in Florida?
- Who files a Florida Notice of Commencement?
- What information must be included in a Florida Notice of Commencement?
- What is the timeline for filing a Notice of Commencement in Florida?
- 3 mistakes in filing a Notice of Commencement in Florida
What is the Florida Notice of Commencement?
A Notice of Commencement is a piece of document that informs project stakeholders about a project’s official start date. It is basically a legal declaration that a construction project has officially started.
Declaring a specific day as the official project commencement date may seem trivial, but it is actually pretty important and extremely helpful. When there is a clear and established first day of work, it becomes easier to determine the deadlines for other construction-related requirements that follow strict time frames.
The deadlines for sending pre-lien notices, for example, are typically calculated from the day labor or materials were first furnished to a project. A Notice of Commencement greatly helps in setting the benchmark for determining these important due dates.
Moreover, a Florida Notice of Commencement also contains other information alongside the official start date. The pieces of information in this document, such as the name of the property owner and a legal description of the property, are all important when filing a mechanics lien.
When is a Florida Notice of Commencement required?
Property owners in Florida are required to file a Notice of Commencement for all construction and improvements of any private real estate property. The only exceptions stated in Section 713.02(5) of the Florida Statutes are for owners whose construction projects are worth $2,500 or less.
Needless to say, federal construction projects in Florida are also not covered by the Notice of Commencement requirement.
Why file a Notice of Commencement in Florida?
Filing a Florida Notice of Commencement has important benefits for all concerned construction participants. Here are some of them.
Avoiding double payment
Recording a Notice of Commencement is mandatory for property owners, which means that failure to file a Florida Notice of Commencement comes with serious consequences. Property owners have ended up being required by court to pay their contractors twice, simply because no Notice of Commencement was recorded.
If an owner pays their contractors while no Notice of Commencement is in effect, the contractors can still file a mechanics lien claim against the property. The lien will likely be awarded to the contractors even if they have already been paid previously, all because the owner did not comply with the notice requirement.
A certified copy of the Florida Notice of Commencement must also be given to the local building department, so filing a Notice of Commencement is necessary to get through the building inspection process. The inspection may be delayed if an owner fails to file this document.
Establishing a good relationship
Lastly, the law also mandates property owners to provide copies of the Notice of Commencement to any person who requests for it. A Notice of Commencement has pieces of information that are vital to the completion of a Florida mechanics lien claim, so construction stakeholders will greatly benefit from having access to a Florida Notice of Commencement.
In this regard, filing a Notice of Commencement and making it accessible for construction participants open communication lines among all stakeholders in a project. It proves that the property owners are diligent in adhering to the statutory laws, which makes a good impression to everyone working on said project.
Who files a Florida Notice of Commencement?
The property owner OR construction lender files the Notice of Commencement.
Property owners or their authorized agents must file a Notice of Commencement in the local clerk’s office in the county where a project is located.
However, if a property owner has a construction lender funding the project, filing a Notice of Commencement becomes the construction lender’s responsibility.
In this case, the property owner does not have to worry about recording a Notice of Commencement at all, and the construction lender becomes liable for all damages and unsettled payments that might come with the project.
Contractors, subcontractors, and material suppliers do not have to file a Notice of Commencement at all. Instead, they are responsible for other required pre-lien notices in Florida, such as the Florida Notice to Owner.
What information must be included in a Florida Notice of Commencement?
The official start date is not the only information that is usually included in a Notice of Commencement document. In Florida, there are specific details that must be in the form for it to be considered compliant to the law. They are the following:
1. A description of the property that is sufficient for identification
This must be a legal description of the property and also include the street address and the property’s tax folio number. If there is no street address available, include an additional physical description of the property that make its location identifiable.
2. A general description of the project
This is a brief statement that describes the improvement or construction being done on the project.
3. The name and address of the owner
This is the name and address of the owner, the party filing the Notice of Commencement. If the party who contracts the property improvement is a lessee and not the property owner, the name of the lessee must be listed as the owner, together with a statement declaring the ownership interest is a leasehold interest.
4. The name and address of the contractor
This is simply the name and address of the contractor for the project
5. The name and address of the surety company
This is the name and address of the company that provides the bond to the property, if any.
6. The name and address of the construction lender
This is the name and address of the party making a loan to the property, if any.
7. The name and address of the property owner’s agent
This is the name and address of the property owner’s designated agent, in case the party filing the Notice of Commencement is not the property owner himself or herself.
Florida state laws require a Notice of Commencement to be in substantially the following form:
Permit No. Tax Folio No.
NOTICE OF COMMENCEMENT
The undersigned hereby gives notice that improvement will be made to certain real property, and in accordance with Chapter 713, Florida Statutes, the following information is provided in this Notice of Commencement.
1. Description of property: (legal description of the property, and street address if available)2. General description of improvement:
3. Owner information or Lessee information if the Lessee contracted for the improvement:
a. Name and address:
b. Interest in property:
c. Name and address of fee simple titleholder (if different from Owner listed above):
4.a. Contractor: (name and address)
b. Contractor’s phone number:
5. Surety (if applicable, a copy of the payment bond is attached):
a. Name and address:
b. Phone number:
c. Amount of bond: $
6.a. Lender: (name and address)
b. Lender’s phone number:
7. Persons within the State of Florida designated by Owner upon whom notices or other documents may be served as provided by Section 713.13(1)(a)7., Florida Statutes:
a. Name and address:
b. Phone numbers of designated persons:
8.a. In addition to himself or herself, Owner designates of to receive a copy of the Lienor’s Notice as provided in Section 713.13(1)(b), Florida Statutes.
b. Phone number of person or entity designated by owner:
9. Expiration date of notice of commencement (the expiration date will be 1 year from the date of recording unless a different date is specified)
WARNING TO OWNER: ANY PAYMENTS MADE BY THE OWNER AFTER THE EXPIRATION OF THE NOTICE OF COMMENCEMENT ARE CONSIDERED IMPROPER PAYMENTS UNDER CHAPTER 713, PART I, SECTION 713.13, FLORIDA STATUTES, AND CAN RESULT IN YOUR PAYING TWICE FOR IMPROVEMENTS TO YOUR PROPERTY. A NOTICE OF COMMENCEMENT MUST BE RECORDED AND POSTED ON THE JOB SITE BEFORE THE FIRST INSPECTION. IF YOU INTEND TO OBTAIN FINANCING, CONSULT WITH YOUR LENDER OR AN ATTORNEY BEFORE COMMENCING WORK OR RECORDING YOUR NOTICE OF COMMENCEMENT.
(Signature of Owner or Lessee, or Owner’s or Lessee’s Authorized Officer/Director/Partner/Manager)
The foregoing instrument was acknowledged before me this day of , (year) , by (name of person) as (type of authority, . . . e.g. officer, trustee, attorney in fact) for (name of party on behalf of whom instrument was executed)
(Signature of Notary Public – State of Florida)
(Print, Type, or Stamp Commissioned Name of Notary Public)
Personally Known OR Produced Identification
Type of Identification Produced
What is the timeline for filing a Notice of Commencement in Florida?
A Florida Notice of Commencement must be filed at least 90 days before a project starts. Once the notice has been filed, project construction is expected to begin within 90 days of the recordation date. Failing to start the project in 90 days invalidates the notice and another Notice of Commencement must be filed.
Another important note to keep in mind is the fact that mechanics liens may take priority over mortgage loans. This means that you must not file a Notice of Commencement before you have your mortgage recorded, otherwise a mechanics lien claimant takes higher priority over your lender.
Also note that a Florida Notice of Commencement expires 1 year after the recordation date, unless otherwise specified on the Notice of Commencement form. All payments done after a Notice of Commencement has expired may be “recovered” by filing a mechanics lien, so owners must be wary of this expiry date.
3 mistakes in filing a Notice of Commencement in Florida
1. Failing to start the project within 90 days after filing
The law requires a Notice of Commencement to be filed before a project officially begins, but it cannot be filed way too early. A project has to officially begin within 90 days after the recordation date, otherwise, the notice will expire and will be considered invalid.
When a notice is already invalid, all payments done afterward may be questioned via a Florida mechanics lien. The courts may side with the lien claimant even if payment has already been made, just because the Notice of Commencement already expired even before the project began.
2. Failing to include all the required information
Since a Notice of Commencement is a mandatory document in Florida, it must also comply with statutory requirements, particularly the information that it must contain.
Names should be complete and accurate with the right suffixes (e.g. Ltd., Inc., LLC) and a legal property description is required. These required pieces of information may seem straightforward but notices may be rejected due to simple typographical errors.
3. Failing to post a copy of the notice on the job site
Posting a copy of the Notice of Commencement in an accessible location on the job site is another requirement. Doing so helps construction parties get relevant information pertaining to the project – it is also a requirement before building inspection can be performed.
Failing to post a copy of the notice may, therefore, cause inspection delays, and may stall the overall project timeline.
Also note that property owners are required to furnish “any person” a copy of the notice upon request. If you are the property owner, you are obligated by law to not withhold a Notice of Commencement from any party who asks for a copy.