Notice of Furnishing is the term used for preliminary notice in four states: Michigan, Ohio, South Carolina, South Dakota. In these states, most parties who furnish labor and/or materials on construction projects are required to send notice of furnishing in order to secure lien rights. Notice of furnishing should be sent proactively, long before a payment issue arises. If a notice of furnishing is sent late or not at all, lien claimants typically lose the right to file a mechanics lien and are left with little recourse in the event of nonpayment.
Even when sending notice of furnishing is not required, it’s generally a good idea to send one anyway. Why? Because sending notice of furnishing – or any preliminary notice – prioritizes your invoice and promotes transparency. When the people funding a construction project know who is contributing labor and/or materials and how much they are owed, the payment process is much more likely to occur smoothly and quickly.
The following states require at least some construction participants to send notice of furnishing in order to secure the right to file a mechanics lien and protect themselves from financial risk. Read on to see if the requirements apply to you or your company, and also to see when notice of furnishing is due.
In Michigan, any party not directly contracted with the property owner (or owner’s agent) must provide a notice of furnishing within 20 days of first furnishing labor and/or materials to the project to secure the right to file a lien. Laborers have a different deadline, they must submit notice of furnishing within 30 days from when wages were due.
In Ohio, all parties who do not have a direct contract with the property owner (excluding laborers) must send a notice of furnishing to protect lien rights if a Notice of Commencement is properly filed.
The notice of furnishing should be after the claimant begins work on the project (early notice is ineffective) and within 21 days of first furnishing labor and/or materials. If notice of commencement is filed late, notice of furnishing is due within 21 days of the date the notice of commencement was filed. If notice of commencement is never filed, sending notice of furnishing is not necessary.
In South Carolina, parties contracted with someone other than the property owner must send a Notice of Furnishing Labor or Materials prior to filing and serving a mechanics lien claim.
There is no time limit for submitting a notice of furnishing in South Carolina, but note that the amount recoverable by lien of a remote claimant is limited to the amount owed by the general contractor to the party who hired the remote claimant – so earlier is better.
In South Dakota, sub-subcontractors and suppliers to suncontractors who wish to secure lien rights must send a Notice of Furnishing Labor or Materials to protect lien rights if the general contractor has filed a Notice of Project Commencement and posted the location notice on the job site.
If required, notice of furnishing is due no later than 60 days after the last date on which the claimant furnished labor and/or materials to the project.