The South Dakota Notice of Furnishing requirements for sub-tier parties is determined by the actions of higher-tiered participants. If the owner or general contractor files a Notice of Commencement on the project, this notice is required in order to secure mechanics lien rights in case of nonpayment. Let’s take a look at when this notice is needed and the rules and requirements surrounding them.
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South Dakota Notice of Furnishing requirements
A Notice of Furnishing is the South Dakota version of a preliminary notice. The specific requirements for this notice are covered under SD Codified L §44-9-53. In South Dakota, almost every party on a construction project are afforded mechanics lien rights.
However, general contractors and owners have the ability to limit the number of potential lien claimants by taking certain actions. If a required party fails to provide a Notice of Furnishing within the required period of time, they will lose the ability to file a mechanics lien on the property for non-payment.
When a South Dakota Notice of Furnishing is required
This notice is required only if an owner or prime contractor file a South Dakota Notice of Project Commencement. A notice of commencement isn’t necessary for a direct contractor to secure their lien rights. It is an optional filing that will force certain parties to send a Notice of Furnishing in order to secure mechanics lien rights. The parties required to send this notice is anyone who didn’t contract directly with the owner or GC. This includes all sub-subcontractors and material suppliers to subcontractors.
One exception to these notice requirements is individual wage laborers whose claims are less than $2,000.
Information required on a South Dakota Notice of Furnishing
South Dakota law is fairly lenient when it comes to the actual form required. The statute merely states that certain information must be contained in order to be valid. Be sure to fill out each section as accurately as possible. Most of this information should be readily available because when a Notice of Commencement is filed, the filing party is also required to post a “location notice” on the job site. The information required on a Notice of Furnishing is as follows:
- Claimant’s information;
- Hiring party’s information;
- Description of the labor or materials provided and the contract;
- If the materials are specially fabricated by someone other than the person giving notice, the contract price and value shall be stated separately.
- Property description sufficient for identification;
- First and last dates of furnishing labor or materials;
- If unknown, then provide the scheduled last day of furnishing.
- Amount claimed to be due (if any).
Sending a South Dakota Notice of Furnishing
Once the notice is filled out properly it’s time to serve it on the required parties. This notice must be delivered to the property owner and the contractor who is listed on the Notice of Commencement. This must be delivered within 60 days of the claimant’s last delivery of materials or work provided to the project.
The statute doesn’t specify how this notice should be sent. However, best practice is to send it by certified or registered mail with return receipt requested. That’s because when filing a mechanics lien in South Dakota, the lien statement must include an attached post office receipt of the mailing of the notice to be valid. If a required contractor or supplier misses this deadline, it is fatal to their mechanics lien rights. However, there are other options to get paid if you didn’t send a preliminary notice.
Payment is a frequent challenge for those in the construction industry. One of the best ways to increase leverage and get paid what you’ve earned is through the use of the mechanics lien process. No one walks onto a project assuming that there will be payment issues. However, when a South Dakota Notice of Furnishing is required on a project, it’s important to secure your ability to protect yourself.
Even if a Notice of Commencement isn’t filed, it’s generally recommended to send some form of preliminary notice regardless. Besides securing the ability to file a mechanics lien, these notices provide other benefits as well, particularly on larger projects. Many times an owner or GC won’t even know a sub or supplier is working on the project. By sending a preliminary notice, this increases a participants visibility on the projects and provides an open channel of communication by providing contact info, and listing the labor or materials that are being furnished.