If you have a construction project coming up, then your contractor may be required to file something known as a notice of commencement. This is a document filed by a construction company that publicly announces a construction project is beginning. It also clearly identifies all project stakeholders involved in the construction project. It can create hurdles when it comes to filing for other permits; however, it also reduces the client’s liability. What does this document do, and why does this notice exist?
If your contracting team files a notice of commencement, this can impact liens for material suppliers, subcontractors, and other parties who might be involved in the construction project. This notice also serves as a measure of protection for the general contractor and property owner. It limits the lien process timeline for anyone who may be seeking to file one against the property.
Importantly, not every state requires a notice of commencement for construction projects. Therefore, general contractors should understand filing guidelines in the state. If this document is required, it should be filed on time.
The purpose of a notice of commencement is to balance the rights of everyone involved in a construction project. Initially, preliminary notices were filed to help property owners keep track of who was involved or contributing to the project. Unfortunately, not all property owners know who is working on their projects. Furthermore, subcontractors and suppliers may not have the information needed about certain jobs.
Therefore, a notice of commencement serves to do more than just announce the start of a new construction project. All information required for subcontractors and suppliers to complete their portion of the project is required in this notice. Furthermore, property owners have made all information about the project public, protecting themselves against risks.
A notice of commencement is an important tool for contractors and property owners for nearly every construction project. If you have a residential or commercial construction project coming up, you must work with an experienced contracting team to guide you through this process. There’s a lot of paperwork you have to follow, so be sure to partner with the right team to complete your project.