What is a Notice of Termination in Florida?

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.  

What is a Notice of Termination in Florida?

In Florida, a Notice of Termination is a formal document used to signal the conclusion of a construction project. It essentially terminates a previously filed Notice of Commencement (NOC), which marks the project's initiation. This termination could signify the completion of the project or its premature end.  

Why File a Notice of Termination?

The filing of a Notice of Termination is not merely a procedural formality; it serves several essential purposes for property owners:

1. Project Completion: Upon successful completion of a construction project, filing a Notice of Termination officially closes the project and releases any liens or claims that might have been placed on the property during construction.

2. Project Discontinuation: If a project is halted before completion, a Notice of Termination is necessary to cancel the Notice of Commencement's effectiveness and to protect the owner from potential legal issues.

3. Property Transactions: Property owners may need to file a Notice of Termination if they wish to sell or refinance their property. This action ensures a clear title and removes any encumbrances related to the construction project.

When Can You File a Notice of Termination?

The timing of filing a Notice of Termination is crucial and governed by specific regulations in Florida:

1. Project Completion: The most straightforward scenario is filing upon project completion, ensuring all parties have been paid and the project is finalized.

2. Partial Completion and Full Payment: If a portion of the project is completed and all involved parties have been compensated, a Notice of Termination can be filed.

3. Expiration of Notice of Commencement: Typically, a Notice of Commencement expires after one year unless otherwise specified. If the project remains incomplete after this period, filing a Notice of Termination is advisable.

Understanding the Notice of Termination Form

A Florida Notice of Termination form must contain specific information to be valid:

1. Notice of Commencement Details: This includes information such as the recording information (book/page numbers) of the original Notice of Commencement.

2. NOC Termination Date: The date when the Notice of Commencement is terminated, which should be at least 30 days after the Notice of Termination is recorded.

3. Property Description: A clear statement identifying the property to which the Notice of Termination applies.

4. Lienor Payment Confirmation: A declaration stating that all lienors associated with the project have been paid in full. This may require attaching the contractor's final payment affidavit as proof.

5. Notifying Parties: A statement confirming that the owner has served a copy of the Notice of Termination to the contractor and all relevant lienors.

Why Terminate Before Project Completion?

While the completion of a project is the most common reason for filing a Notice of Termination, there are instances where owners may need to do so prematurely. Some of these reasons include:

1. Need for New Financing: If the project's financial landscape changes and new financing is required, terminating the existing Notice of Commencement and filing a new one might be necessary.

2. Property Sale: Selling a property mid-project necessitates terminating the existing Notice of Commencement to ensure a smooth transaction for the new owner.

3. Contractor Issues: Issues with the prime contractor, such as termination or disputes, might warrant terminating the Notice of Commencement.

4. Project Cancellation: If an owner decides to cancel the project altogether, a Notice of Termination is required to close the project officially.

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 -

1. Requirement for new financing
2. Sale of property
3. Termination of the prime contractor
4. 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:

1. All the details mentioned are in the Notice of Commencement, or they can even attach a copy of the NOC.
2. The date of the NOC and the book and page reference numbers of the recording office document.
3. The date when the NOC is terminated. This date should not be earlier than 30 days after the recording of the Notice of Termination.
4. A statement detailing the property on which the Notice of Termination applies.
5. A statement detailing that all the lienors have been paid in full.
6. 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 5^th 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.

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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.  

Requirements and Considerations

Before recording a Notice of Termination, owners must pay close attention to the following:

1. Accuracy: The details provided in the Notice of Termination must be accurate. Any fraudulent or misleading information could lead to legal repercussions.

2. Lienor Payments: It's imperative to ensure that all lienors, including subcontractors and suppliers, have been paid in full before filing the Notice of Termination.

3. Completion Status: Florida law mandates that a Notice of Termination can only be filed if the project is complete or, if incomplete, all lienors have been paid in full.

Key Takeaways

• A Notice of Termination signals the end of a construction project in Florida.

• Filing a Notice of Termination is crucial for project completion, property transactions, or project discontinuation.

• It can be filed upon project completion, partial completion with full payment, or after the Notice of Commencement expires.

• The form requires specific details, including NOC information, effective date, property description, lienor payment confirmation, and notification of parties.

• Ensure accuracy of information, full payment to lienors, and compliance with Florida law before filing.

• Failing to file or filing a false Notice of Termination can lead to legal complications.

• Seek professional guidance for a smooth and compliant process.

For further guidance or assistance with complex situations, consulting experts at SunRay, who specialize in Florida lien lawswebinars, is always a smart choice. We offer personalized advice to protect your rights and ensure a successful project outcome. Call us today on 800-403-7660 to get the payment you deserve!

FAQs

1. What happens if I don't file a Notice of Termination?

Failure to file a Notice of Termination leaves the Notice of Commencement in effect, potentially causing complications for selling or refinancing the property and leaving you liable for potential liens.

2. Who can file a Notice of Termination?

The property owner or their authorized agent can file the Notice of Termination.

3. Can I file a Notice of Termination before project completion?

Yes, but only if all lienors have been paid in full and the termination conditions are met as per Florida law.

4. What if there are unpaid lienors?

All lienors must be paid in full before filing a Notice of Termination. If there are unpaid lienors, you risk legal disputes and potential claims against your property.

5. Are there penalties for filing a false Notice of Termination?

Yes, filing a false Notice of Termination can lead to legal consequences, including claims for damages from affected parties.

6. Where can I get help with filing a Notice of Termination?

For expert guidance on navigating the legal complexities of construction projects and ensuring compliance with Florida's regulations, consider seeking assistance from professionals specializing in construction law.

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