The Notice to Owner (NTO) is one of the most important pre-lien notices in Florida. Like most pre-lien notices, this document secures and protects your right to file a mechanics lien should a payment issue arise as you provide your services to a project.
This step-by-step guide will walk you through the process of properly serving your Notice to Owner, from finding the required information to avoiding the most common mistakes contractors and suppliers make in fulfilling the NTO requirement.
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- What Is the Florida Notice to Owner?
- How to Properly Serve a Notice to Owner in Florida
- Best Practices When Preparing and Serving the Florida Notice to Owner
- 3 Common Mistakes When Preparing and Serving the Florida Notice to Owner
What Is the Florida Notice to Owner?
The Notice to Owner is a preliminary notice in Florida, which means that it is a document that must be sent early in the project.
The purpose of serving the Notice to Owner is to inform the property owners and other relevant parties about your participation in the project. The Notice to Owner also lets them know that you are willing to exercise your lien rights should you not get paid for your services.
Think of the Notice to Owner as a proactive way of preserving your lien rights, which is also a good opportunity to open communication lines with the stakeholders up in the contracting chain.
Who needs to serve a Notice to Owner in Florida?
All construction participants that are not in direct contact with the property owner must serve a Notice to Owner. If you are a contractor, subcontractor, or material supplier working under a general contractor, you must submit a Notice to Owner.
If you are a subcontractor, or material supplier working under a general contractor, you must submit a Notice to Owner. The same applies if you are a sub-subcontractor or a material supplier working under a subcontractor.
General contractors – parties with a direct contractual relationship with a property owner – are not required to serve a Notice to Owner; however, there are other notice requirements that could apply to them.
Note that property owners in Florida are allowed to request their general contractors for a full list of subcontractors and materialmen in a project. If you are a prime contractor and receive a such a request from a property owner, you have 10 days upon receipt to serve them with a complete list of subcontractors and material suppliers under your wing.
Are there any parties exempted from filing a Notice to Owner in Florida?
Yes. These parties are NOT required by law to send a Notice to Owner:
- General contractors who have a direct contact with the property owner
Note that while general contractors are not required to serve a Florida Notice to Owner, they might still have to serve another notice that lists all their subcontractors or suppliers. In Florida, a property owner must ask general contractors to provide them with such a list, and general contractors have to serve it within 10 days after receiving the formal request from the owner.
- Individual laborers and design professionals
Laborers are the individuals who provide only labor for the project and must not be responsible for furnishing materials. Design professionals, on the other hand, include architects, engineers, interior designers, etc.
- Project participants in “subdivision improvements”
As defined under Florida Statutes Section 713.04, work on subdivision improvements shall include the following: the grading, leveling, excavating, and filling of land, including the furnishing of fill soil; the grading and paving of streets, curbs, and sidewalks; the construction of ditches and other area drainage facilities; the laying of pipes and conduits for water, gas, electric, sewage, and drainage purposes; and the construction of canals and shall also include the altering, repairing, and redoing of all these things.
How to Properly Serve a Notice to Owner in Florida
If you are one of the construction participants who are required to send a Notice to Owner, you must follow these three basic steps:
- Gather the required information
- Prepare the Notice to Owner document
- Serve the Notice to Owner
1. Gather the required information
A Notice to Owner in Florida must contain specific information for it to be considered valid. These are the pieces of information that you must include in your Notice to Owner:
- Owner’s name and address
This pertains to the name and address of the property owner. If there are multiple property owners, it is best practice to send a Notice to Owner to each one of them.
- General description of services or materials
This is a general statement of the type of service that you are providing to the project.
- Property description that is sufficient for identification
This is a description of the property, which you should be able to find in the Notice of Commencement posted on the job site or in the building permit.
- Lienor’s name and address
This is your name and address.
- Name of the general contractor and the party who hired you
These are the names of the higher-tier parties that are not the property owner. If you were hired by a subcontractor, write the details of both the general contractor and the party who hired you.
Where can you find the information needed in filing a Florida NTO?
The best way to find all the relevant information such as the name(s) of the property owner(s) is to look for the Notice of Commencement or the building permit.
Property owners are required to file a Notice of Commencement in Florida. You may find a copy of it either in a conspicuous location in your project site or in the county clerk’s office where the project is located.
You may also write the property owner or the general contractor to ask for a copy of the Notice of Commencement in Florida. If you still can’t get hold of this notice, you may consult the building permit instead.
What if you cannot find all the information that you need?
You may still serve a Notice to Owner in Florida if one or two pieces of information are missing. You can leave some items blank, and you can ask the receiving party to fill the information for you.
It is best practice, however, to make sure that you can prove that you have tried to find all the required details. You may do this by writing down all the information that you found on the Notice of Commencement, and also take note of the bits of information that are missing.
Note that you are not liable if the pieces of information written on the Notice of Commencement are wrong and inaccurate. The property owner is expected to exercise due diligence in filing their Notice of Commencement, and construction participants are also generally expected to use this notice as a reference for their lien-related documents.
Another best practice is to include a note in your Florida Notice to Owner asking the recipient to provide the correct or missing information if any of the details on your NTO are inaccurate.
You may also do “cold calling.” Contact your clients via telephone to ask for the information that you need. However, keep in mind that this should be done as your last resort. If you were given wrong information via a phone call, there is no paper trail to prove that the person on the phone made a mistake. Requesting information is still best done via writing.
In any case, do not let missing information stop you from serving the Florida Notice to Owner on time. Florida statutes say that “errors or omissions” do not prevent a construction party from enforcing a claim, as long as they have substantially complied with the rules, specifically those concerning required deadlines, required warning language on the Notice to Owner form, and required recipients of the notice.
2. Prepare the Notice to Owner document
Once you have all the information ready, you must now prepare the document itself. Note that the Florida Statutes recommend the Notice to Owner to be substantially similar to a specific format and to contain specific paragraphs.
How to prepare the Florida Notice to Owner form
Below is the Notice to Owner form per Section 713.06(c) in Florida’s state laws. Note that the law requires the Notice to Owner to contain a specific warning message:
The Notice to Owner in Florida must preferably be in the form above, although this is not a hard-and-fast requirement. You may add more details and tweak the formatting, but the warning message must be included. Under no circumstances must you fail to include the warning.
Must I prepare different notices for a project that spans multiple lots?
The answer to this question depends on how many contracts and owners are involved. In general, if you are working on a project that covers multiple lots and separate tracts of land, you may serve a single Notice to Owner if a) there is only one contract under which you are providing service, and b) there is only one owner of the property.
Real estate property developments, for example, typically involve multiple lots of land. As long as your service to these lots are all under the same contract and as long as these lots all belong to the same owner, you only have to prepare one Notice to Owner.
If the ownership of multiple lands is divided across multiple property owners, the safest way to go is to prepare separate Notices to Owner and serve them to each owner accordingly.
The idea is that you should be serving a Notice to Owner for each property against which you may file a mechanics lien. If different owners are tied to multiple properties, even if you are working under one contract, chances are you may have to file multiple mechanics liens.
This implies that in Florida, you are expected to protect your right to file a mechanics lien against each lot that is owned by different parties.
3. Serve the Notice to Owner
Once you have the Notice to Owner ready, you must then send it to the appropriate parties.
Who should I send the Notice to Owner to?
The suggested form (pictured above) also recommends that you specify the parties on whom you are serving the Notice to Owner. Section 713.06(2) basically states that:
- A sub-subcontractor or a materialman to a subcontractor must serve a copy of the notice on the contractor
- A materialman to a sub-subcontractor must serve a copy of the notice to owner on the contractor
- A materialman to a sub-subcontractor shall serve the Notice to Owner on the subcontractor if the materialman knows the name and address of the subcontractor
- A construction participant required to submit a Notice to Owner must also serve a copy on the owner’s designated representative who is named in the Notice of Commencement, if applicable
Generally speaking, it is best practice to send it to the property owner(s), the general contractor, the lender (if applicable) and all other parties above you in the contracting chain.
Remember that if the property owner has specified a designee on the Notice of Commencement, it is vital that you also send your Notice of Commencement to their designee.
When must the Notice to Owner be served?
The Notice to Owner may be sent before you start working on a project or within 45 days after you begin furnishing labor or materials to the project.
Note that if you are a fabricator of materials, your first day of work starts on the day of fabrication. The materials do not have to be incorporated into the project for your 45-day time frame to begin ticking.
Also note that service of the Notice to Owner is effective at the time of mailing only if the document is sent within 40 days after you begin rendering service to the project (from Section 713.18 of the Florida statutes). Otherwise, the Notice to Owner will be considered served at time of receipt.
It is considered best business practice to serve the Notice to Owner as early as possible. If doable, you must serve the Notice to Owner even before you begin working on a project. Preparing the Notice to Owner right before the deadline may cause compliance issues, which may be fatal to your lien rights.
How should the Notice to Owner be served?
The Notice to Owner may be served by personal delivery or by registered, Global Express Guaranteed, or certified mail, with postage prepaid. Ensure that you keep a documentation or proof that you have mailed your notice and that it has been received.
Remember to send a Notice to Owner to each property owner in a project, especially if the project covers multiple parcels and lots that are owned by different parties. Keep in mind that you are sending a Notice to Owner to protect your lien rights, so you must send a notice to each property owner that may potentially receive your mechanics lien claim.
What if the ownership of a property is transferred to an associated company? Should I serve the new owner(s) with another Notice to Owner?
The case of Marble Unlimited, Inc. v. Weston Real Estate Investment Corporation in Florida tackles this issue. The district court of appeal ruled that transferring the ownership of a property to an associated corporation must not trigger a new Notice to Owner requirement. The court further explained that, if allowed, corporate owners may take advantage and switch ownerships in order to frustrate valid lien claimants.
This means that if the ownership of a property gets transferred to an associated corporation, you are not expected to serve another Notice to Owner. However, there is no ruling yet in cases where the new owners are completely unassociated with the existing property owners.
Best Practices When Preparing and Serving the Florida Notice to Owner
1. Serve the Notice to Owner as early as possible
Be aware that missing the Notice to Owner deadline is fatal to your lien claim. You should keep this in mind and make it part of your project processes to send out a Florida Notice to Owner as early as possible. If you are unsure whether you are required to serve a Notice to Owner or not, it is best to err on the side of caution and serve the notice anyway so you can protect your lien rights.
2. Remember to serve the Notice to Owner on all parties up the contracting chain
When serving a Notice to Owner, be sure that you deliver them to all parties up the contracting chain. This pertains to all parties that separate you and the property owner. If you are a sub-subcontractor, for example, you must serve the Florida Notice to Owner not only on your subcontractor but also to the general contractor and the property owner.
3. Keep a document proving that you have duly served the Notice to Owner
Florida is very strict in imposing the Notice to Owner requirement, so always make sure that you have proof of delivery whenever you serve a Notice to Owner. Keep and track all mailing receipts. If you are serving the Notice to Owner via personal delivery, ask the recipient of the notice to sign an acknowledgment of receipt form.
3 Common Mistakes When Preparing and Serving the Florida Notice to Owner
1. Missing the deadline
This is the most dangerous mistake anyone can make regarding the Notice to Owner in Florida. The state does not tolerate late service of the Notice to Owner, which means that you must not wait until the last minute to serve this notice.
Keep in mind that the Notice to Owner may be submitted even before you start working on a project. It is best practice to send the Notice to Owner as early as possible.
2. Not including the required warning in the document
The warning message must appear in your Notice to Owner. You may be liberal with formatting and including more information than necessary, but do not drop any of the information that the state laws require you to provide.
Required Information in the Florida Notice to Owner:
- Owner’s name and address
- General description of services or materials
- Property description that is sufficient for identification
- Lienor’s name and address
- Warning message
3. Failing to serve on the appropriate parties
Although this mistake may not necessarily be fatal to your mechanics lien rights, committing it may lead you to go through issues that you could otherwise avoid.
The Notice to Owner is a good way to keep you in the loop among the top-tier parties in the contracting chain. Sometimes property owners and lenders are proactive in ensuring that all parties get paid, so the Notice to Owner could get you paid without having to go through a mechanics lien.
Keep in mind, however, that the Notice to Owner is not equivalent to a mechanics lien. This document will not encumber a property since it is not something that you file or record in a county clerk’s office. Filing the mechanics lien will still be your best tool when payment disputes occur.