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Notice of Commencement in WI

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Hi - I am an owner of land in WI and expect to soon contract with a GC to build a custom home. Any advice particular to our situation in Vilas County WI would be appreciated. Thanks.

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May 28, 2020
Notices of Commencement aren't really a thing in Wisconsin - the Wisconsin mechanics lien statute doesn't provide for a Notice of Commencement filing. With that being said, there are some other elements of Wisconsin's mechanics lien laws that might be helpful for an owner to know going into their project.

What an owner should expect on a Wisconsin construction project

There are a number of different topics that an owner should be at least a little familiar with when heading into a project on their property. Of course, even if you are wholly unfamiliar with the topics below, it's possible to pull of a construction project without a hitch. But, since you asked, here are some topics that come to mind. Obviously, this isn't an exhaustive list - but understanding these topics will help to avoid common problems that arise on construction projects.

Use a written contract with a specified price

This part is basic and simple, but it's crucial. Always use a written contract for construction work. That way, it's easy to set out the scope of work for the project, the price, how progress payments will work, and how to deal with issues like delays, defects, and other problems. More contract discussion, here: Construction Contract Documents | A Guide to Common Contract Parts.

Require written and signed change orders

One of the easiest issues to pop up on a construction job is to use informal or sloppy change order processes. Requiring that all change orders be in writing and signed will help make sure that you're aware of all changes on the project, and it will avoid disputes over whether extras were approved and what should be paid for those extras.

Further change order discussion here: Change Order Form — Free Template Download and Best Practices.

Understand how mechanics lien rights work

First, know that mechanics lien rights will be available to just about everyone who works on the project - the GC, their subcontractors, suppliers, etc. But, those parties will only be able to file lien claims against your property if they aren't paid for their work. So, instituting a strict lien waiver collection policy can help you make sure everyone gets paid and no liens are filed on the project. Generally, it's a good idea to think of lien waivers as a receipt for payment - any time someone gets paid, they should provide that receipt (waiver). More waiver discussion here: (1) How To Handle Requesting & Tracking Lien Waivers; and (2) The Property Owner’s Guide to Lien Waivers. If a lien does get filed for some reason, this guide will help: A Mechanics Lien Was Filed on My Property – What Do I Do Now?

Get ready to receive preliminary notices

Additionally, it will be helpful to understand the notices you'll be receiving throughout the project. First, the GC will need to provide you with a specific lien notice directly in the contract or shortly after they begin work. Further, the subcontractors and suppliers on your job will also be sending preliminary notices letting you know they're working on the project and that, if worse comes to worst, they'll be able to file a mechanics lien. But, these notices are all simply informational and are intended to build a healthy, transparent, and collaborative project. Plus, if there is an issue later on, you'll have everyone's contact info to help nip that in the bud. You can learn all about those notices here: (1) Why Preliminary Notices Are Great For Property Owners & GCs; and (2) Wisconsin Preliminary Notice Guide and FAQs.

If a Notice of Intent to Lien is received, resolve the dispute

There is a more troubling notice Wisconsin claimants may send, though. If the GC, subcontractor, supplier, etc. isn't getting paid what they're owed, they may send a Notice of Intent to Lien. Essentially, this document is a lien warning - it provides the owner and other recipients notice that there's a payment issue, and it gives those recipients a chance to solve the issue before a lien gets filed. A Notice of Intent to Lien must be sent at least 30 days before a lien can be filed - so, that provides about a month to negotiate and settle payment claims before having to deal with a lien. You can learn more on WI's Notice of Intent rules here: Wisconsin Notice of Intent FAQs & Guide. And, if you do receive one of these notices, this guide will help: I Just Received a Notice of Intent to Lien – What Should I Do Now?
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