This article discusses the requirements and the timelines for sending this Form if you want to terminate your Notice of Commencement!
As per the Florida Construction Lien Law (Section 713.13 of the Florida Statutes), the owner or the owner’s agent is responsible for recording a Notice of Commencement (NOC) before a construction project begins. The Notice of Commencement (NOC) indicates the start of the project and is a vital document in protecting the rights of the owner, contractor, and suppliers.
Why should Owners file a Notice of Termination?
If the owner of the property wishes to stop the project midway for any reason, or the owner wishes to sell or refinance the property, or the project is completed, they need to terminate the Notice of Commencement by recording a Notice of Termination. This form essentially cancels the Notice of Commencement’s effectiveness on the property. Before the Notice of Termination is filed, a copy of the notice should be sent to all the parties who have served a Notice to Owner. In Florida, this form is also referred to as Notice of Termination of Notice of Commencement.
Why do Owners terminate the Notice of Commencement before Project Completion?
Some of the reasons why an owner may terminate the Notice of Commencement (NOC) without completion of the project are -
- Requirement for new financing
- Sale of property
- Termination of the prime contractor
- No desire to continue the project
When can Owners file a Notice of Termination?
A Notice of Commencement usually expires after a period of one year from the date of filing. Exceptions to this can occur if a different date is specified in the Notice of Commencement (NOC) or if a new or amended Notice of Commencement (NOC) is recorded.
A Notice of Termination can be filed when the construction project is complete or if a part of the project is completed and all the parties have been paid in full.
Notice of Termination Form
A Florida Notice of Termination Form should include all of the information as mentioned in the Notice of Commencement, like the NOC recording information (book/page numbers), the date of effectiveness, a statement identifying the termination of the entire project or a portion of the real property, a statement that all lienors have been paid (along with a copy of the contractor’s final payment affidavit), and a statement that the owner has served a copy of the notice to all the required parties.
What is the Notice of Termination Requirements?
As per Section 713.13 of the Florida Statutes, to correctly terminate the Notice of Commencement, the owner needs to sign and swear to a Notice of Termination, which includes the below details:
- All the details mentioned are in the Notice of Commencement, or they can even attach a copy of the NOC.
- The date of the NOC and the book and page reference numbers of the recording office document.
- The date when the NOC is terminated. This date should not be earlier than 30 days after the recording of the Notice of Termination.
- A statement detailing the property on which the Notice of Termination applies.
- A statement detailing that all the lienors have been paid in full.
- A statement detailing that prior to filing the Notice of Termination, the owner has a served a copy to the contractor and every lienor who has a direct contract with the owner or who has served a Notice to Owner.
To fulfill the above-mentioned 5th point, owners can get a copy of the contractor’s final payment affidavit. This affidavit provides the information whether all the lienors have been paid in full or not. If an owner is using this affidavit, they need to attach a copy of it to the Notice of Termination.
Things to Consider by Owners before Recording the Notice of Termination
- One of the key things that owners should consider before recording the Notice of Termination is the accuracy of the details mentioned in the Notice of Termination.
- If the owner or the contractor mentions any fraudulent statements in the notice, and as a result a lienor suffers damages, then the lienor can file a claim for damages against the owner/contractor. Hence, it is always recommended that the owner obtains the contractor’s final payment affidavit which will clearly provide information about who has and who has not been paid on the project.
- If in case, it is brought to the owner’s attention that there are lienors who have not bene paid yet, then they need to ensure that all the lienors are paid in full before recording the Notice of Termination.
- The Florida Construction Lien Law also clearly states that owners cannot record a Notice of Termination unless the project is completed or if the project stops before completion, then all the lienors have been paid in full.
The process of preparing and sending a Notice of Termination can be complex; hence, it is important that you have the right knowledge about the process. As a best business practice, property owners should be proactive in recording the Notice of Termination in case they plan to stop the construction work on the project. Sending the Notice of Termination correctly and as per the process can protect the project owners as well as the contractors, subcontractors, and suppliers working on the project.
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