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Understanding the Notice of Commencement

Understanding the Notice of Commencement

May 14, 2019

Deadlines and time frames are strongly enforced in the construction industry, at least when legal paperwork is concerned. Knowing the exact start date of the project can be very important when tracking these deadlines, so you might wonder: when exactly does a construction project start? The Notice of Commencement gives you the answer.

Notice of Commencement Definition: What is the NOC?

In basic terms, the notice of commencement — also known as the “Notice of Project Commencement” or the “Affidavit of Commencement” — is the official document that declares the exact start date of a construction project. This date typically coincides with the day the contractor, subcontractor, or supplier starts providing labor and/or materials to the project.

Who files the Notice of Commencement?

The top-of-chain party, typically the property owner or the general contractor, usually files the notice of commencement.

This notice is served just before or shortly after work is performed on a project, and it is officially recorded at the local state office where the project is located.

States like Ohio also require the lender to record a notice of commencement before releasing funds to the contractor.

There are also states that require subcontractors to file a notice to inform the property owner or the general contractor that work has officially begun. Failure to record a notice may effectively invalidate a subcontractor’s lien rights.

The rules vary in every state, so make sure that you know the specific lien laws that govern your project.

Also note that not all states have rules on filing the notice; the majority of them do not even mention it at all.

What states require a Notice of Commencement?

The lien laws in the following states explicitly require the property owner or the general contractor to file a notice of commencement: Florida, Georgia, Iowa, Michigan, and Ohio. Notice of commencement forms for each state are available online for download.

Keeping track of the date recorded in the notice of commencement allows a subcontractor or a supplier to plan a schedule for submitting other vital documents. If, say, the state requires the preliminary notice to be sent within 15 days after the project has started, the 15-day count must begin with the date stated in the notice.

Where is it optional to send a Notice/Affidavit of Commencement?

Filing the notice of commencement is optional in states like South Carolina, South Dakota, and Texas. In some instances, the corresponding pre-lien requirements change depending on whether an affidavit of commencement has been filed or not. In South Dakota, for example, filing a notice of furnishing (also known as the preliminary notice) is only required after the submission of the notice of commencement.

In states like Nebraska, the option to file a notice is allowed for residential construction projects. Utah, on the other hand, requires the filing of the notice of project commencement only for publicly-funded construction work.

How do you file a Notice of Commencement?

The rules on how and where to record the notice also vary per state. In general, the notice may be filed at the local county courthouse or with the state construction registry. The notice form must also include specific information such as the name and address of the owner or contractor, the name and location of the construction project, and a legal description of the property.

All project participants are ideally notified after the filing. Copies of the notice must be served to relevant parties and must be posted at the job site for everyone to read. Some states even have specific requirements on how to distribute copies of the notice. Florida, for example, requires the owner or the general contractor to attach a blank notice of furnishing to each copy of the notice/affidavit of commencement that they are distributing.

How does the notice affect the different stakeholders of a project?

The intent behind the notice is to protect the property owner or the general contractor from having to face an unlimited number of mechanics lien claims after the project concludes.

By designating an official start date, the number of potentially valid lien claims are reduced to only those that meet the notification deadlines.

Filing the notice of commencement also impacts potential lien claimants, from the contractor to the subcontractor and all the way to the other parties down the contracting chain.

Preserving one’s lien rights require meeting specific deadlines, so knowing the exact commencement date of a project and building a time table around it are extremely important.

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