An Iowa Notice of Commencement is an essential step for any residential project within the state. This document signals the start of the project and provides valuable information to the property owner and any subcontractors or suppliers on the project. Not only that, if a general contractor fails to file this notice, they will lose their ability to file a mechanics lien. Let’s take a look at all of the rules and requirements for an Iowa Notice of Commencement.
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Notice of Commencement Overview
There are a handful of states that require a Notice of Commencement to be filed for a general contractor to secure mechanics lien rights. In Iowa, a Notice of Commencement (also referred to as a Commencement of Work notice) must be filed on every residential construction project. A residential project in Iowa includes all occupied single or two-family dwellings.
A Notice of Commencement is a document filed by the owner-builder or general contractor that signifies the official starting date of a construction project. This notice is meant to not only inform the property owner of potential lien claimants, but also provide the necessary project information for subs and suppliers to do so.
How to file an Iowa Notice of Commencement
Something particularly unique to Iowa’s lien laws is the Iowa Mechanics Notice & Lien Registry (MNLR). This is an online database where all mechanics liens, pre-lien notices and other lien-related documents are filed and posted. A Notice of Commencement must be filed within 10 days of commencement of work on the project.
In order to file a notice and have it posted on the MNLR, there are two options. One is to create an account so you can upload and post your document yourself. Option two, is print out your notice and either mail or fax it to the Iowa Secretary of State Office.
Required information on a Notice of Commencement
An Iowa Notice of Commencement must be filled out completely and accurately. A notice with any false or incorrect information will not be valid. That’s because subcontractors and subs are relying on that information for their preliminary notice and lien filings.
According to Iowa mechanics lien law, a Notice of Commencement must contain the following information in order to be valid:
- Owner information;
- General contractor/owner-builder information;
- Property address;
- Legal description of the property;
- Date the work commenced;
- Tax parcel identification number;
- County where the property is located;
- Email address of the person submitting the notice.
Failure to file a Notice of Commencement
As stated above, if the general contractor fails to file and send a timely Notice of Commencement, they will lose their mechanics lien rights. However, if 10 days have passed since the project started, and the GC has failed to post a Notice of Commencement; a subcontractor can take actions. Any subs not the project, after the 10 day timeframe, can post of a notice of commencement along with their preliminary notice. That’s because a preliminary notice can’t be filed until a Notice of Commencement has. However, the general contractor will have already lost their lien rights.
Additional required notice
Not only do general contractors need to file a Notice of Commencement, there is another notice that’s required to be given to the property owner. The purpose of this additional notice is to inform the property owner of the potential for mechanics lien to be claimed on the property, and how to find more information. The statute requires that this notice be in 10pt, bold-faced font, and include the following statement:
Persons or companies furnishing labor or materials for the improvement of real property may enforce a lien upon improved property if they are not paid for their contributions, even if the party has no direct contractual relationship with the owner. The mechanics’ notice and lien registry provides a listing of all persons or companies who have posted a lien or who may post a lien upon the improved property. If the person or company has posted its notice or lien to the mechanics’ notice and lien registry, you may be required to pay the person or company even if you have paid the general contractor the full amount due, Therefore, check the mechanics’ notice and lien registry website for information about the property including persons or companies registered as furnishing labor or materials to you property. The information in the mechanics’ notice and lien registry is posted on the internet website of the mechanics’ notice and lien registry.
The Iowa Mechanics Notice and Lien Registry can be found at www.sos.iowa.gov/mnlr, and the toll-free number is 1-888-767-8683.
All of this, in its exact form, must be given to the property owner in writing. This can be accomplished either by an individual document, or it can be included in the contract itself. If you regularly work as a GC on residential projects, it’s in your best interest to include this warning as standard in every contract. That way the only notice requirement you’ll beed to concern yourself with is a Notice of Commencement.
No one goes into a project expecting payment problems, but they still come up pretty regularly. If you are a general contractor on a residential project in Iowa, it’s important to follow these requirements as strictly as possible. Any form or deadline missteps can lead to the loss of all mechanics lien rights.