Editor’s Note: This article was originally published in 2012 and was completely updated with new information in September 2018 and again in December 2018.
Generally speaking, when working on a private construction project in Florida, you must deliver a “Notice To Owner” to preserve your mechanics lien rights. Like any law, there are exceptions. This post reviews the notice to owner rule, the exceptions, and some best practices for your construction company, whether you’re a contractor, material supplier, or something else.
Florida’s Notice to Owner Requirement
Many states have preliminary notice requirements, and they go by various names. In Florida, the preliminary notice is referred to as the “Notice to Owner” or “NTO,” and sending an NTO is required in order to maintain your lien rights on a Florida-based construction project.
Who Needs to Send an NTO in Florida? And to Whom?
The short answer: Subcontractors and suppliers not contracted to the property owner.
The long answer: Any party (except wage laborers and design professionals) who does not have a direct contractual relationship with the property owner is required to serve a Notice to Owner. The Florida NTO must be sent to — wait for it — the owner!
But, it’s common for contractors to overlook that the law requires it to be sent “up the chain” as well, meaning that you should send a copy of this notice to the owner, and to every party between you and the owner in the “payment chain” (see “The Payment Chain” illustration).
There may be another party aside from those up the hiring chain that may be required to receive the Notice to Owner in Florida. This party is the owner designee, or in other words, a person (or persons) that the property owner designates as a party to receive the preliminary notice in addition to themselves. Since the owner designee may be required to receive the notice, the owner is responsible for making that party known. The way the owner makes the Owner Designee known to the other parties on the construction project is by listing the designee on a Notice of Commencement.
Special requirement for Florida GCs:
On Florida construction projects, there is a unique notice requirement for the Prime Contractor (which can be the general contractor or the construction manager). If the property owner requests it, the prime contractor must provide a list of all of the subcontractors and suppliers working on the project within 10 days of the owner’s initial request.
Keep in mind:
- Laborers and design professionals are not required to provide an NTO on Florida construction projects.
- The owner may request that the GC provide a list of all subcontractors and suppliers contracted with the GC. The GC must provide this list to the owner within 10 days of the request. This list is not the same as an NTO, but it is still an important part of the lien law statute in Florida.
When Do I Send an NTO in Florida?
The short answer: Within 45 days (or before beginning work on a project).
The long answer: Florida requires that a Notice to Owner must be sent within 45 days of beginning work on a project, or before the project starts. Perhaps the most dangerous detail of Florida’s notice to owner rules is what courts consider to be the “first furnishing.” Since your notice to owner absolutely cannot be sent later than 45 days from first furnishing, the date that marks the “first furnishing” is a critical date.
The clock starts ticking when one of the following happens:
- 1) 45 days from first furnishing services or materials,
- 2) 45 days from when work begins on making specialty materials, or
- 3) 45 days before the owner’s final payment to the prime contractor.
In Florida, it’s okay to send an NTO early. Florida lien law clearly empowers parties to send preliminary notice as early as they want. But don’t make the mistake of sending your notice to owner late. While Florida’s lien law is clear with respect to sending notices early (it’s good — go ahead and send ’em in early!), the law is the exact opposite when it comes to late preliminary notices (not good — don’t you dare send your notices late!).
Keep in mind:
- Failure to provide the preliminary notice within the statutorily mandated time frame is fatal to the lien claim in Florida.
- It’s okay to send a Florida Notice to Owner early, even before commencing work on a project! The statute clearly empowers parties to send preliminary notice as early as they want.
- The preliminary notice is considered delivered at the time of mailing only if the notice is sent within 40 days of first furnishing labor or materials, otherwise, the notice is considered served on the date of receipt.
- BEST PRACTICE: Since you can’t send notice too early in Florida, and you can certainly file it too late, it’s a best practice for companies to get their notices out as early as possible.
How Do I Send an NTO in Florida?
The short answer: Send it certified mail.
The long answer: The notice must be delivered by certified mail or personal delivery, with evidence of delivery obtained. It’s important to not only deliver this notice, but to keep evidence of the delivery so you can later prove compliance with the requirement.
Keep in mind:
- If the NTO is sent improperly or late, it will terminate any lien rights.
Free Download: Florida Notice to Owner Form
Click on the form image to download a free copy of the Florida NTO form to use on your projects and jobs!
Exceptions to Florida’s Notice to Owner Requirement
Rules always have exceptions, and folks are always looking for these exceptions. After all, if an exception to the Notice to Owner applies, it may save your company money in having to comply with the requirement, and it may also save your company’s lien rights if it forgot to send the notice.
Exception 1: You Contract With The Owner (Or Some Variation Thereof)
The primary exception to Florida’s Notice to Owner requirement is when you contract directly with the property owner.
This exception appears obvious at first blush, but it’s more complicated than that. Contracting with the owner includes a direct contract with the actual property owner, but also includes contracting with the owner’s “agent” or with a general contractor who shares a “corporate identity” with the owner.
When dealing with an apartment, condo, or other development, there are often middlemen between parties who consider themselves “general contractors” and owners. On development projects, it’s not uncommon for the owners of the property to hire a developer and for that developer to then hire a general contractor to oversee the project. On condos and apartments, apartment associations or agents are often in charge of hiring a party to perform construction or repair work. Thus, when a general contractor has contracted with one of these middlemen, that GC may need to send an NTO to preserve lien rights.
It’s hard to rely on this exception because it will all boil down to a judge’s later determination. So the best practice is to always send preliminary notice, no matter what!
Exception 2: Laborers, Professionals & Site Workers
Laborers are the most protected class of mechanics lien claimants across the nation, and it’s no different in Florida, where they are excused from delivering an NTO. To qualify as a laborer, you must be performing labor at the site only, and not providing any materials.
Professionals are also excused from sending a Notice to Owner. These “professionals” include architects, engineers, land surveyors, mappers and landscape architects.
Finally, “site work” type of work gets a pass on the Florida Notice to Owner too. This is work done to the job site itself to make the site suitable for building, which includes site work, excavating and similar services.
Exception 3: Subdivision Improvements
Another thing to consider that notice to owner is not required for liens that qualify as “subdivision improvements” under the Florida mechanics lien statute. Subdivision improvements refer to lienors who perform services or furnish material to real property for the purpose of making it suitable as the site for the construction of an improvement or improvements.
That includes, but is not limited to, “grading, leveling, excavating, and filling of land, including the furnishing of fill soil; the grading and paving of streets, curbs, and sidewalks; the construction of ditches and other area drainage facilities; the laying of pipes and conduits for water, gas, electric, sewage, and drainage purposes; and the construction of canals and shall also include the altering, repairing, and redoing of all these things.”
Of course, the best idea is to play it safe and send an NTO anyway.
Do You Ever Need to Send More Than 1 NTO?
Since an NTO is sent primarily to preserve lien rights, whether or not multiple NTO’s will be required will be directly related to whether multiple liens would need to be filed.
Making things more interesting, the Florida mechanics lien statute allows for one single claim of lien when labor, services, or materials were furnished for more than one improvement under the same contract, even if the improvements span separate lots, parcels, or tracts of land as long as they’re owned by the same owner.
That may have been a little confusing, so let’s break it down as follows:
>IF work spans multiple lots, parcels, or tracts of land, one lien (and therefore, one NTO) may still be acceptable, IF there is only one prime contract, AND IF the property is all owned by the same owner.
>IF there’s more than one owner, or if there is more than one prime contract, you’ll want to send multiple NTOs. Even if not necessarily required, it’s the safest way to proceed. Plus, the cost of sending an extra NTO pales in comparison to the potential cost of losing lien rights.
Keeping the above in mind, let’s look at three hypothetical project scenarios that might create issues or confusion.
Project Scenario 1 – A Development Project
Development projects are typically set out under one development or prime contract, and prior to construction, the property is usually owned by one party. This could get tricky, though, if the land is divided and distributed to more than one owner. But, if the property is owned by one party and there’s only one prime contract on the project, one NTO should do the trick.
Bottom Line: One NTO should do the trick for a typical development project – as long as ownership hasn’t been divided yet.
Project Scenario 2 – A Condominium Project
Condominiums might present more of a headache. Again, the underlying ownership and contractual relationships will determine how many NTOs must be sent. If the condominium units are truly individually owned, work for any individual unit will require it’s own claim. Further, regardless of who owns the unit(s), if work was done pursuant to more than 1 prime contract, a separate lien would be required for work done on under each prime contract. Sometimes, condominiums will only have 1 true owner and the unit “owners” will actually only own a right to use or inhabit the unit (rather than owning the underlying property). In such a situation, a project will be treated as having one owner.
Again, the rule is that one single claim of lien may be made when labor, services, or materials were furnished for more than one improvement under the same contract, even if the improvements span separate lots, parcels, or tracts of land as long as they’re owned by the same owner. If work is done on multiple lots, parcels, or tracts and the above does not apply, sending multiple NTOs may be necessary.
Bottom Line: There’s a chance that multiple NTO’s may be required on a condominium project, depending on ownership situation.
Project Scenario 3 – An Apartment Building Project
Apartment buildings should be a little easier. Apartments are typically owned by one party, so ownership shouldn’t be a major issue. Of course, if work is commissioned by a lessee instead of an owner, there are a number of factors that could result in no lien rights for a project. However, whether work is done pursuant to one prime contract is still a concern. If work is done on multiple properties (separate lots, parcels, or tracts of land), and work has been done pursuant to more than 1 prime contract, multiple liens will be required (meaning multiple NTOs will also likely be required).
Bottom Line: There’s a chance that multiple NTO’s may be required on an apartment project, depending on the contract(s).
Best Practice Is to Always Send the NTO
While the Florida NTO requirement does have some exceptions, it’s never a bad idea to send the notice. The exceptions cited above are all ambiguous at times and can come down to a decision from a judge. This means your mechanics lien rights would be up in the air while the particular issue gets litigated, which would cost you time and money. The easy solution is to always err on the side of caution and always send your Notice to Owner.
Good Ideas when Sending the Florida Notice to Owner
A. Documenting search
It’s a good idea to clearly document your search through the public records. Document not only the information you found but also the information that you did not find. If you searched for a notice of commencement and couldn’t find it, document that you did so and that the information was not available in the records. If you find something, store what you found exactly so you can refer to it later when asked to prove your substantial compliance.
B: Send A Notice With the Information You Have
In all of the Florida cases finding “substantial compliance” with the Notice to Owner requirement, the sending party had sent something of a notice. It is simply unacceptable to send nothing at all or even to send anything late. It’s a big, big, big mistake to hold off on sending the Notice to Owner while you go scouring around the world and through your contacts looking for unidentified parties. Look in the public records, find what is there, and then send the notice. Period.
C: Make A Formal Request For Corrective Information in the Notice
In all likelihood, you’ll have at least some of the information correct in the Notice to Owner. You’ll likely be able to find at least an ownership record, or maybe you simply know the identity of your customer. In any event, send the notice out to the parties you know and include a mechanism for those parties to provide corrective or missing information. In fact, formally demand it of them. Cite the area of law that requires they provide this information.
Bad Ideas when Sending the Florida Notice To Owner
A. Holding Off On Sending Notice
We alluded to this bad idea above. It’s a very bad idea to sit on a Notice to Owner while you look for missing information. It is not your obligation to find the missing information. Subcontractors and suppliers clearly have the legal right to rely on the available public records. Accordingly, you will find much harsher punishment in the delay on sending an incomplete notice than you will find in the incompleteness itself.
B: Calling Your Customer or Other Contacts To Get More Information
The problems with calling customers to get more information were discussed in the article “Why Requests for Information Are Better Than A Third Party Calling Your Customers.” In sum, however, calling around to get more information:
- (i) Is not reliable;
- (ii) Is not well documented;
- (iii) Results in unnecessary delays;
- (iv) Costs too much;
- (v) Frequently results in inaccurate information;
- (vi) Angers customers and aggravates everyone; and
- (vi) Ultimately, isn’t even remotely required by the law.
Florida Construction Payment Resources
Are you in the construction business in the Sunshine State? No matter whether you’re a general contractor, a material supplier, or something else entirely, a great place for you to get lots of helpful construction payment information and resources is on the Florida Resources page on the Levelset website.
If you’re looking for information about how to file a mechanics lien, then you should definitely read this post: Mechanics Lien Florida: How to File a FL Mechanics Lien.
Information about lien waivers including free lien waiver forms is available here: Florida Lien Waivers Forms and Guide.
And last but not least, you can always talk to us. Click the button below to schedule a time to speak to a Levelset Construction Payment Expert. We’re here to help you get paid.