In this blog, we'll explore the fundamental rules governing NTO and Mechanic's Lien procedures in Florida and uncover some lesser-known exceptions that can safeguard your rights even when deadlines seem to be missed.
What are the essential rules governing Notice to Owner and Mechanic's Lien procedures?
1. Sending a Notice to Owner
- Sending a proper statutory Notice to Owner (NTO) is essential for construction projects in Florida. Use the appropriate statutory form, not a generic notice.
- The NTO must reach the property owner within 45 days from the project's start or material delivery, though it's better to aim for 40 days due to postal processing time.
- SunRay Construction Solutions offers attorney-approved statutory forms to ensure compliance and timely submission of NTOs.
- Sending the NTO early, well before the 40th day, is recommended to maximize protection and secure lien rights. Even if the project work starts months later, serving the NTO as soon as you have a contract in place is prudent.
2. Understanding the Claim of Lien and Notice of Nonpayment Deadlines
Another vital rule concerns the Claim of Lien and Notice of Nonpayment deadlines. The Claim of Lien must be received no later than 90 days from your last work or delivery of materials to the job site. Both the 45-day and 90-day periods are counted from the day after material delivery, including weekends and holidays. If the 45th or 90th day falls on a weekend or legal holiday, the deadline shifts to the next business day.
Remember that you don't have to wait until the 90th day to file a lien. You can do so while still working on the project, preferably within 60 days of recording the lien or sending the bond claim.
3. Filing Lawsuit to Enforce Lien vs. Filing a Lawsuit on a Bond
The final set of rules pertains to filing a lawsuit to enforce a lien or a bond claim. For the Claim of Lien, you must file a lawsuit within one year of the recording date of the lien. For lawsuits on a bond claim, the deadline is one year from your last work on the job.
However, waiting for a year is not recommended. If you haven't received payment within 60 days of recording your lien or bond claim, consider seeking legal assistance to enforce your claim promptly.
What are the NTO Exceptions you may not be aware of?
- No NTO Required When Contracted Directly with Owner: Though not mandatory, sending an NTO, even when you have a direct contract with the property owner, is highly recommended, especially for residential jobs. This notice can prompt the owner to prioritize payment.
- No NTO/NTC Required When Contracted Directly with Bonded Contractor on Public Projects: If you have a direct contract with the bonded contractor on a public project, you don't need to send a Notice to Contractor (NTC) equivalent. However, it's still good practice to send one.
- No Notice of Nonpayment Required When Contracted Directly with Bonded Contractor on Public Projects: On public projects as a subcontractor to a bonded contractor, you are not required to send the Notice of Nonpayment. Yet, sending it can serve as added protection.
Understanding the Notice to Owner and Mechanic's Lien rules is essential for anyone involved in construction projects in Florida. While these rules provide a framework for securing lien rights, knowing the exceptions can be equally important. Always be proactive and seek legal advice promptly if payment issues arise to protect your interests and ensure timely compensation for your work and materials. Remember, knowledge of the law can sometimes grant you rights you may not even know you have!
Below are some questions that construction professionals may be interested in:
1. What is a lien letter?
A Lien Letter is a straightforward letter that communicates your intention to place a lien on a property if you don't receive payment for your work. If you haven't been paid for your services and want to inform your customer officially, sending a demand letter is the way to go.
2. What is a notice of intent to file a lien in Florida?
The Intent to Lien Form Florida is a legal document that serves as a pre-warning to potential lien holders about an upcoming lien. This form must be filed before starting work on the project and acts as a notice to anyone who might consider making a claim on the property in question.
3. What does the NTO do?
A Notice to Owner (also known as an NTO) is one of the most powerful collection tools in the construction industry. Its function is to secure your lien and bond claim rights in the event that whoever hired you is unable or unwilling to pay you.
4. What is the purpose of Notice to Owner in Florida?
In Florida, a Notice to Owner (NTO) holds significant importance as a crucial collection tool. If you are involved in a construction project and lack a contract directly with the property owner, sending an NTO becomes essential to protect your lien or bond claim rights.