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Notice of Commencement for Residential Projects: Who Must File and When?

Notice of Commencement for Residential Projects: Who Must File and When?

August 12, 2020

Filing a mechanics lien almost always involves recording or serving one or another type of construction notice. There’s the preliminary notice, which is typically required to preserve one’s lien rights, and there’s the notice of intent to lien, which is usually served on the property owner to inform them that a mechanics lien is about to be recorded against their property.

Send a Notice of Commencement for Residential Projects in 60 seconds

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If a construction participant wants to know the official start date of a project—the date when all construction work is considered to have officially begun—they may want to consult the Notice of Commencement.

This guide answers fundamental questions about filing a Notice of Commencement on residential projects. Not all states require or even regulate the use of the Notice of Commencement. However, knowing how it works can be highly beneficial, especially if you’re working in one of the states that require it.

What is a Notice of Commencement?

A Notice of Commencement is a document that officially declares a construction project’s start date. Some states also refer to it as Notice of Contract or Notice of Project Commencement.

On top of bearing a project’s exact commencement date, the notice of commencement also contains some of the important pieces of information about a project, including the name(s) of the property owner, the legal description of the property, and the name of the construction lender, if any. These details are important, especially for subcontractors and material suppliers who are filling out their preliminary notices and mechanics lien forms.

Which states require a Notice of Commencement for residential projects?

The following are the states where a Notice of Commencement is required in residential projects:

States that require a Notice of Commencement (residential)

The notice is optional in Nebraska, South Carolina, South Dakota, and Texas. The rest of the states have no specific regulations on filing a Notice of Commencement.

Who files a Notice of Commencement for residential projects?

A Notice of Commencement, whether in residential or non-residential projects, is typically filed by a property owner, although a general contractor or another higher-tier party may also be required to record this document.

In Florida, for example, the responsibility of filing a Notice of Commencement falls on the construction lender if a project is being funded through a construction loan. In Louisiana and Iowa, it is the general contractor who must file the Notice of Contract or the Notice of Commencement.

The table below details which specific parties must file a Notice of Commencement in each state where filing this document is required:

Who files a Residential Notice of Commencement

When must you file a Notice of Commencement on a residential project?

The deadline for filing a Notice of Commencement differs per state. The following table shows the specific deadlines for each state that requires a Notice of Commencement to be recorded:

When must you file a Residential Notice of Commencement

 

How to file a Notice of Commencement on a residential project

How to file a Residential Notice of Commencement in residential projects (1)

1. Determine if you are required to file a Notice of Commencement

If you are a property owner, construction lender, or general contractor, you have to make sure that a valid NOC is recorded. The first step is, therefore, to determine whether it is you who must file the notice, or you have to remind someone else to do it as required by the law.

Note that filing a Notice of Commencement is typically the responsibility of the property owner, but other higher-tier parties may also have to file the document (see table above). Note that in Georgia, the NOC rules allow either the property owner or the general contractor to file the NOC as long as these parties discuss which form must be posted on site.

Ohio also generally requires property owners to file the NOC, but general contractors may be allowed to file the notice in case the property owner fails to do so. Similarly, Iowa allows lower-tier parties such as subcontractors and suppliers to file the NOC if the general contractor does not record the notice on time.
If you are working in one of the states that regulate the use of NOC in residential projects, make sure that you familiarize yourself with state-specific NOC rules.

2. Prepare the Notice of Commencement form

The Notice of Commencement form is not the same per state, but the Residential NOC generally contains the following details:

  • The name and address of the property owner
  • The name and address of the general contractor
  • The legal property description
  • A brief project description
  • The name, address, and contact details of the lender, if applicable
  • The name(s) of the property owner’s legal representative(s)
  • The expiration date of the NOC
  • The signature(s) of the property owner(s)

3. Record the Notice of Commencement

Once you have the NOC form ready, the next step is to have it recorded in the correct office. The deadlines for filing the NOC are shown above; the following table shows the specific offices where you have to record your Notice of Commencement:

Where must you file a Residential Notice of Commencement

Note that you must file the NOC in the appropriate office where your project is located, except in Iowa, in which filing is done online.

4. Display the Notice of Commencement on the project site

After recording the NOC, you have to post a copy of the recorded NOC form in a conspicuous location on the project site. The Notice of Commencement is the document that is consulted by subcontractors and material suppliers when they are completing their preliminary notice forms, so the NOC must be in a visible location.

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Ideally, the NOC must be posted in the same visible location throughout the duration of the project.
Displaying the NOC on the project site is typically the final step. However, a couple states further require that you send out copies of the Notice of Commencement. Iowa requires the general contractor to serve a copy of the NOC to the property owner, while Ohio requires the property owner to serve a copy of the NOC to the general contractor.

Best practices when filing a Notice of Commencement for residential projects

1. Fill out the Notice of Commencement form early

The deadline for filing the NOC usually falls either before or within the first few days of the general contractor’s first day of work. The NOC form must, therefore, be prepared early so you don’t risk missing the deadline. As soon as the permit for the project is secured, all the required information must be collected and the NOC template must be filled out.

2. Write complete names and addresses on the NOC form

The Notice of Commencement lets the subcontractors and material suppliers know the names and addresses of the property owners, among other information. The names and addresses must be specified on the NOC form and written accurately so lower-tier parties are able to send their preliminary notice and notice of intent to lien to the correct recipients.

3. Communicate with other parties to ensure that the NOC is filed

Even if filing the NOC is not your responsibility, it is best practice for you to ensure that a valid NOC is eventually recorded on time. If you are a general contractor, for example, and you work in a state where the property owner is responsible for filing the NOC, make sure that you communicate with the owner and ask them if the form has been filed. Having open communication with your clients will always benefit you in the long run.

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