A Kentucky Notice to Owner is required on all private projects in order to secure mechanics lien rights. It doesn’t have to be sent or filed before the project begins, but rather they need to be sent before filing a mechanics lien. In addition to this, there is also another notice that will affect your priority ranking against mortgages or conveyances that may affect the property. Here is a guide to everything you need to know about the notice requirements in the state of Kentucky.
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What is a Kentucky Notice to Owner?
A Kentucky Notice to Owner is one of the two statutorily provided notices. There are either required or useful to the mechanics lien process. One notice, called a Notice to Owner, is covered under K.R.S. 376.010. Although sent after work is complete, operates more like a traditional preliminary notice. This is meant to protect remote claimants (i.e., subs and suppliers) by informing the property owner of their unpaid debts, and is a prerequisite to filing a lien claim.
The other type of notice in Kentucky is referred to as a Notice of Contract. Instead of being sent to the property owner, this notice is filed in the county recorder’s office. This can be useful to secure priority for your mechanics lien.
Why send a Kentucky Notice to Owner?
First and foremost, sending a Notice to Owner is essential to secure your right to file a mechanics lien on the project. No one ever goes into a project expecting payment problems, but they happen. All the time! The best way to protect yourself is through the ability to file a mechanics lien.
As for a Notice of Contract, as stated above, this can give the contractor priority over any subsequent mortgages, transfers, or other encumbrances on the property. It should be noted though, that if the contractor eventually files a lien claim, it will be limited to the amount that was listed in this notice.
Besides these two notices, there’s also the option to send a preliminary notice anyways. Even if not required, sending preliminary notice is always a good idea. Depending on the size of the project, there could be a severe visibility issue on the project. Owners rarely know who every sub and supplier is working on their property. By sending a notice at the beginning of the project, channels of communication open, and the likelihood that you get paid quickly is increased.
Who needs to send a Kentucky Notice to Owner? Who is it sent to?
Anyone who didn’t contract directly with the property owner must send a Notice to Owner. This is required on any private construction project in the state of Kentucky in order to secure mechanics lien rights on private projects. It only needs to be sent to the owner of the property.
Notice of Contract
This notice is not required in Kentucky, but filing such notice does provide a notable benefit to those who do. If this is filed before any mortgages or conveyances are filed on the property; it will grant the mechanics lien priority over any subsequent transfers or encumbrances.
What needs to be included in a Kentucky Notice to Owner?
The statute governing the Notice to Owner doesn’t have any specific requirements. It merely states that the notice should (1) be in writing, (2) delivered within the statutory time period, (3) state the noticing party’s intention of holding the property liable, and (4) state the amount for which he will claim a lien.
However, it’s best practice to provide a little more information to make things crystal clear. Be sure to provide all of your contact information, along with the contact info of the owner, and the person who hired you. Also, a brief description of the labor or materials you provided to the project is helpful to support your claim amount.
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Notice of Contract
A Notice of Contract will essentially be in the same form as a Kentucky lien claim itself. Thus, the notice should include the following information:
- Name and address of the claimant;
- The property owner’s information;
- Hiring party’s information;
- Amount due, with all credits and offsets calculated;
- Property description, sufficient for identification; &
- The last date of furnishing labor or materials.
When does a Kentucky Notice to Owner need to be sent?
The timeframe to send a Notice to Owner depends on what type of project you’re working on and the amount of your claim. Let’s start with owner-occupied, residential projects. For these types of projects, the owner must receive notice no more than 45 days after the last item of labor or materials were furnished.
For all other private projects, the timeframe depends on the amount of the claim. If the unpaid amount is less than $1,000, then notice must be received within 75 days of the last day of furnishing labor or materials. And, lastly, if the claim is over $1,000, then Notice to Owner should be received within 120 days of the last furnishing.
Failure to file a Notice to Owner in a timely fashion will extinguish all rights to file a mechanics lien. Don’t miss this deadline!
Notice of Contract
There is no specific deadline to file a Notice of Contract. As we mentioned earlier, filing this notice is meant to establish priority over any subsequent mortgages or conveyances. Therefore, it stands to reason, that the sooner you file this Notice of Contract, the better. It should be filed before any mortgage, or title transfer is filed, in order to be effective against them.
How does a Kentucky Notice to Owner need to be sent?
This notice must be sent by either certified or registered mail. It’s important to note that Kentucky law states that the notice is considered delivered when it is sent to the owner’s last known address. Meaning that, in general, the owner is deemed to have received notice once the notice is sent in the mail.
Notice of Contract
A Notice of Contract isn’t sent to a particular party, but rather it must be filed in the county records. In Kentucky, a Notice of Contract must be filed in the county clerk’s office where the project is physically located. This can either be mailed in or brought into the office personally.
The rules and requirements for Kentucky notices can be confusing to those who are unfamiliar with how they work. Particularly, since there may be multiple notices required on a single project. Besides the obvious function of securing mechanics lien rights, there are numerous other benefits to sending notices. Be sure to follow this guide to ensure you are paid what you’ve earned.