.png){kind=small}
In this blog post, we will delve into the importance of a Notice to Owner, examining its prerequisites and ramifications for both private and public projects. This way you will understand the importance of an NTO, and why you shouldn’t miss sending one!
What is a Notice to Owner?
When you furnish labor and/or materials to a construction project without a direct contract with the property owner, you need to send a Notice to Owner within 40 days from the first day of your involvement in the project. This notice acts as a formal communication to secure your lien or bond claim rights.
It's important to note that there is an exception to this timeline for specially fabricated materials. For instance, if you're working on custom-made glass designed exclusively for a particular building, the clock starts ticking as soon as the fabrication process begins.
Private Projects vs. Public Projects
- Construction projects can be categorized as private or public.
- Private projects involve residential or commercial properties.
- Public projects are owned by government entities (cities, states, counties).
- Public projects cannot be liened in some jurisdictions, including the state of Florida.
- Foreclosure cannot be claimed to gain ownership of public property.
- Public projects often require contractors to obtain bonds for payment security.
- It is advisable to send a Notice to Owner, even if you lack a direct contract with the general contractor holding the bond.
- Sending a Notice to Owner ensures the protection of your rights and establishes a record of your involvement in the project.
Key Differences in the Notice to Owner (NTO) requirements for Private Projects and Public Projects
Private Projects
- NTO is typically sent directly to the property owner or party responsible for payments.
- Specific timeframes exist for delivering the NTO, usually determined by local laws or contract terms.
- NTO content includes claimant's information, work description, and amount owed.
- In some jurisdictions, a Notice of Commencement may be required before sending the NTO.
- Sending an NTO is crucial for preserving construction lien rights.
- It is advisable to send NTOs in advance, not waiting until the last minute.
Public Projects
- NTO is often submitted to the general contractor, construction manager, or government entity overseeing the project.
- Strict statutory deadlines must be followed, governed by specific regulations and procurement laws.
- NTO content may require project-specific legal information, such as project name and contract number.
- Notice of Commencement may not be necessary for public projects.
- NTO is typically a prerequisite for asserting bond claim rights in public projects.
Sending and Receiving a Notice to Owner
- Notice to Owner (NTO) must be sent within 40 days from the first day of labor and/or material provision on the project.
- It is essential to ensure that the NTO is received by the 45th day from the first furnishing.
- Sending the NTO well in advance is recommended, rather than waiting until the last minute.
- Some companies utilize NTOs as collection tools, sending them around day 35 if payment has not been received, to expedite the payment process.
Note:
If the project surpasses $2,500, it is strongly advised to send a Notice to Owner and protect your lien rights.
Conclusion
By now, you understand the criticality of safeguarding your payment rights when engaging in construction projects. One vital measure to achieve this is sending a Notice to Owner, which plays a key role in securing your construction lien or bond claim rights. To ensure proper documentation of your involvement in the project and protection of your payment rights, it is crucial to comprehend the timelines, distinctions between private and public projects, and adhere to best practices. By doing this, you can strengthen your position and help your business succeed.
