Notice of Commencement Requirement
Nebraska is one of the relatively few states that specifically allows for a Notice of Commencement to be filed. Unlike some other states with notice of commencement requirements, though, in Nebraska a Notice of Commencement is completely voluntary. Not only that, but while these documents are generally filed by the property owner or lender, they can be filed by any party on the job, even a lien claimant, and such a filing can have a big impact on other parties’ rights.
Nebraska Notice of Commencement laws provide unique consequences and opportunities for the parties who file them. For property owners and lenders, the Notice of Commencement can describe and limit the property that may be affected by mechanics liens, and can determine lien priority by setting the date the lien “attaches” to the property.
Subcontractors or other potential lien claimants may also file a Notice of Commencement in Nebraska, in some circumstances, and some slightly different rules apply. A potential lien claimant can file a Nebraska Notice of Commencement only if no other Notice of Commencement has been filed, and may not set the time period for which the Notice of Commencement is effective. Filing the Notice of Commencement works to set the priory date, just like a notice filed by the property owner, but there is a unique wrinkle when the notice is filed by a lien claimant. Mechanics liens in Nebraska have equal priority when a Notice of Commencement has been filed (otherwise they have priority in the order of attachment). This equal priority date is generally when the NOC was filed. However, if the party who filed the NOC had previously filed a mechanics lien with priority over some third party, all subsequent mechanics lien claimants will also have priority over that third party.
This means that every participant construction projects in Nebraska have an interest in the Notice of Commencement, because it can have an impact on everybody’s mechanics lien rights.
Generally, a Notice of Commencement is a form publicly filed to signify that a construction project is going to begin, or has begun. While Notice of Commencement filing and content requirements are generally similar throughout states in which they are required, Nebraska’s Notice of Commencement has some unique features, some of which, as noted above, depend on the party who is filing the document.
Nebraska NOCs must be recorded with the county recorder’s office in the county in which the property is located, and in some cases must also be delivered to the property owner. Any party in Nebraska can make the NOC process really easy by filing and serving the document online.
This page provides frequently asked questions, forms, and other helpful information about Nebraska’s Notice of Commencement.
Watch this short video that explains important Notice of Commencement requirements in easy to understand terms.
No, there is no specific requirement that a Notice of Commencement be filed by a property owner or construction lender on projects in Nebraska. However, filing an NOC can have benefits for property owners and construction lenders. A contracting property owner can 1) set the date of attachment for any subsequent lien claims; and 2) limit the availability of liens “to a particular improvement project, or portion thereof, on the real estate.”
Sometimes. When a Notice of Commencement is filed by a “claimant who is entitled to record a lien” that party must provide a copy of the notice to the property owner. This copy must be sent to the property owner “not later than the day [the Notice of Commencement] was recorded.”
If this requirement is not met, the claimant filing the Notice of Commencement is liable to the property owner for any damages caused by the failure to comply.
Since there is no specific requirement for a property owner or a construction lender to record a Notice of Commencement in Nebraska, there are no required deadlines by which it must be filed.
However, there are still timing considerations to take into account.
Specifically, if there is a loan, do not file the notice of commencement before the mortgage is recorded. If a Notice of Commencement is filed prior to the construction mortgage / deed of trust, any mechanics lien filed against property will have priority over the construction lender. It is possible for a property owner to file an NOC before finishing the mortgage process because they mistakenly believe they must file the NOC to get their building permit – but this can have significant consequences for the lender. While the bank ultimately prevailed in a situation in which the NOC and deed of trust were delivered for recording in the same envelope and the NOC was stamped first, they still had to go to court to fight about it, so it’s a good idea to make sure the construction loan is filed first, for priority purposes.
Also, a Nebraska NOC may be limited in the duration of it’s validity – and if no expiration is noted on the NOC itself, it is only valid for one year after its recording. However, the contracting property owner may extend the duration of the NOC by another filing.
In Nebraska, a Notice of Commencement is recorded with the register of deeds in the county in which the property being improved is located.
Unlike many other states with Notice of Commencement filings, the process in Nebraska is accomplished solely by the recording of the document by the property owner – there is no requirement that the Notice of Commencement be posted on the property itself.
When filed by the property owner (or on the property owner’s behalf), the information required to be included on a Notice of Commencement is:
Further, the notice must be signed by the contracting property owner.
No. In Nebraska, there is no ability for a property owner to designate any other party to receive notices. There are generally no preliminary notices required prior to filing mechanics lien in Nebraska, so there is no reason that a party designated to receive notice would be worthwhile.
Nebraska law is silent with respect to providing NOC information or copies of the NOC itself to sub-tier participants on the project. This is likely also due to the fact that, unlike many other states with NOCs, Nebraska doesn’t have required preliminary notice requirements for which claimants could rely on the NOC for the required information.
There is, however, a requirement to provide a copy of a notice of terminationof a notice of commencement to all project participants who have requested that they be notifiedof any termination of the notice of commencement, and publishing a notice of the recording of the notice of termination in a newspaper at least once a week for three consecutive weeks.
Yes. A contracting property owner has some control over the duration of a Notice of Commencement in Nebraska. No matter if a shorter time period is listed, a Nebraska NOC is always effective for at least 6 months from recording. And, if no duration is listed on the document it is effective for 1 year from its recording.
A Nebraska Notice of Commencement can be extended, however, by recording a continuation statement referring to the original notice of commencement recording and stating the date to which the notice of commencement’s duration is extended. This extension, however, must be signed by the contracting property owner, and must be recorded prior to the date on which the original NOC’s effectiveness lapses.
No. There is not a requirement that the NOC needs to be notarized in Nebraska.
There is no specific requirement that a Nebraska Notice of Commencement be terminated, the NOC expires pursuant to the effective duration either set forth on the NOC or by statute.
However, there is the ability to terminate a Notice of Commencement in Nebraska (either as a whole or only as to a portion of the property), but the procedure is complex, convoluted, and frustrating. In order to terminate a notice of commencement, the property owner must comply with the following requirements:
No, there is no requirement for GCs, subcontractors, or suppliers to file a Notice of Commencement in Nebraska. However, Nebraska law specifically provides any party who is entitled to record a mechanics lien the ability to file a Notice of Commencement if the property owner has not.
There may be advantages to doing so, since filing a Notice of Commencement sets the date on which mechanics liens attach for priority purposes. This means that a potential lien claimant can set the date a future potential lien would attach, so as not to worry about losing priority to another encumbrance that may be filed prior to the filing of the lien itself.
No. Nebraska generally does not require any preliminary notice to be provided prior to the filing of a mechanics lien claim, and the recording of a Notice of Commencement does not change this.
No. The requirements of filing a mechanics lien, and the ability to file a mechanics lien are unaffected by the recording of a Notice of Commencement. However, the Notice of Commencement sets the time for the attachment of any subsequent mechanics lien with respect to priority issues, and can specify a particular portion of the property subject to the improvement instead of the property as a whole.
Yes, if the property owner has not filed a Notice of Commencement. If there is no Notice of Commencement applicable to a certain work of improvement, Nebraska allows any party entitled to file a mechanics lien to file a Notice of Commencement. The notice must contain certain information and comply with recording and service requirements.
If a potential lien claimant files a Notice of Commencement, s/he must also send a copy of the notice to the contracting property owner not later than the day it is recorded. If this requirement is not met, the potential lien claimant is liable to the property owner for damages caused by the failure.
The information required on a Nebraska Notice of Commencement is a little bit different when the notice is filed by a potential lien claimant rather than the contracting property owner. In this case, the notice must include:
The notice must be signed by the project participant filing the notice.
Yes. When filed by a project participant other than the contracting property owner, a Nebraska Notice of Commencement expires one year from the date the notice was recorded. Unlike when filed by the property owner, a potential lien claimant has no ability to set the effective duration of a Notice of Commencement.
No. There is not a requirement that the NOC needs to be notarized in Nebraska, it just needs to be signed by the potential lien claimant.
No, the Notice of Commencement filed by a potential lien claimant expires one year after the date on which it was recorded. The ability to terminate a Notice of Commencement in Nebraska is limited to a notice filed by the property owner.
No. Not only is there no specific requirement for Notices of Commencement on public jobs in Nebraska, such a filing is not even contemplated by Nebraska statutes.
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Forms compliant with Nebraska’s notice of commencement statute and for every county.
The Nebraska Notice of Commencement rules and requirements are found within the state’s general lien law statutes, which can be found in Nebraska’s Construction Lien Law, Neb.Rev.St. § 52-115 et. seq. which is reproduced in Levelset’s Nebraska Mechanics Lien Law Resources and FAQs.
The below statute is an excerpt from that law that relates to the Notice of Commencement requirements.
(1) All liens attaching at the same time have equal priority and share the amount received upon foreclosure of the liens and available for distribution to construction lien claimants in the same ratio as the ratio of the particular lien bears to the total of all liens attaching at the same time.
(2) Except as provided by subsection (3) of this section, liens attaching at different times have priority in the order of attachment.
(3) A claimant who records a notice of commencement after he or she has recorded a lien has only equal priority with claimants who record a lien while the notice of commencement is effective. Any priority which the claimant gained over third parties by recording his or her notice of lien is preserved for the benefit of all claimants having equal priority under this subsection.
(1) A notice of commencement must be signed by the contracting owner, be denominated notice of commencement, and state:
(a) The real estate being or intended to be improved or directly benefited, with a description thereof sufficient for identification;
(b) The name and address of the contracting owner, his or her interest in the real estate, and the name and address of the fee simple title holder, if other than the contracting owner; and
(c) That if, after the notice of commencement is recorded, a lien is recorded as to an improvement covered by the notice of commencement, the lien has priority from the time the notice of commencement is recorded.
(2) The notice of commencement may state its duration, but if a duration is stated of less than six months from the time of recording, the duration of the notice is six months. If no duration is stated, the duration of the notice is one year after the recording.
(3) The notice of commencement may state that it is limited to a particular improvement project, or portion thereof, on the real estate. But the limitation is not effective unless the particular improvement, or portion thereof, to which it applies is stated with sufficient specificity that a claimant, by reasonable inquiry, can determine whether his or her contract is covered by the notice of commencement.
(4) A contracting owner may extend the duration of a notice of commencement by recording before the lapse thereof a continuation statement signed by him or her which refers to the record location and date of recording of the notice of commencement and states the date to which the notice of commencement’s duration is extended.
(5) If no notice of commencement applies to an improvement, any claimant who is entitled to record a lien may record a notice of commencement denominated notice of commencement, claimant recording, signed by him or her, stating:
(a) In accordance with subsection (10) of this section, the real estate being or intended to be improved or directly benefited, with a description thereof sufficient for identification;
(b) The name and address of the contracting owner against whom the notice of commencement is effective;
(c) The name and address of the claimant recording the notice of commencement;
(d) The name and address of the person with whom the claimant contracted with respect to the improvement;
(e) A brief description of the services or materials provided, or to be provided, by the claimant for the improvement; and
(f) That if, after the notice of commencement is recorded, a lien is recorded as to an improvement covered by the notice of commencement, the lien has priority from the time the notice of commencement is recorded.
(6) A claimant recording a notice of commencement, not later than the day it is recorded, must send a copy thereof to the contracting owner. The claimant is liable to the contracting owner for any damages caused by failure to comply with this subsection.
(7) Sections 52-125 to 52-159 apply equally to all notices of commencement, but as to a notice of commencement recorded by a claimant:
(a) Notwithstanding any stated duration, the duration is one year after the recording; and
(b) The limitation under subsection (3) of this section is not effective.
(8) Unless a notice of commencement is limited to a particular improvement project, or portion thereof, it covers all improvements made on the real estate described therein whether or not they were contemplated at the time of the recording.
(9) Unless a notice of commencement provides otherwise, it covers improvements made on real estate not owned by the contracting owner if, under subsection (4) of section 52-133, a lien arises against the contracting owner’s real estate described in the notice of commencement as a result of the improvements.
(10) A notice of commencement recorded by a claimant under subsection (5) of this section may describe all or any part of the contracting owner’s real estate being improved or directly benefited.
(1) A contracting owner may terminate a notice of commencement as to all or any identified portion of the real estate subject to the notice of commencement by:
(a) Recording a notice of termination denominated termination of notice of commencement and containing:
(i) The information required by subdivisions (1)(a) and (1)(b) of section 52-145 for a notice of commencement;
(ii) A reference to the recorded notice of commencement by its record location and a statement of its date of recording;
(iii) A statement of the date as of which the notice of commencement is terminated which date may not be earlier than thirty days after the notice of termination is recorded; and
(iv) If the notice of termination is to apply only to a portion of the real estate subject to the notice of commencement, a statement of that fact and a description of the portion of the real estate to which the notice of termination applies;
(b) Sending, at least three weeks before the effective date of the notice of termination, a copy of the notice of termination, showing the date it was recorded, to all claimants who have requested that the owner notify them of the recording of a notice of termination;
(c) Publishing a notice of the recording of the notice of termination, which notice must comply with the provisions of subsection (2) of this section and be published at least once a week for three consecutive weeks in a newspaper having general circulation in the county where the recording occurs, the last publication of which must be at least five days before the stated termination date; and
(d) Recording an affidavit stating that notice of the recorded notice of termination has been sent to all claimants who have requested notice and that publication has been made. The affidavit must state the newspaper and dates of publication and include a copy of the published notice.
(2) The published notice of the recording of the notice of termination must contain the information required for the notice of termination under subsection (1) of this section, a statement of the date on which the notice of termination was recorded, and a statement that all lien claims for which a notice of lien is not recorded by the termination date may be defeated by a transfer of the real estate.
(3) A purchaser, judgment creditor, or other person having a lien against the real estate may rely on the affidavit without obligation to inquire as to its accuracy, and is not prejudiced by its inaccuracy.