Florida Notice To Owner Mistakes That Can Kill Your Mechanics Lien Rights

See original page at Florida Notice To Owner Mistakes That Can Kill Your Mechanics Lien Rights

Anyone doing construction in Florida knows that a “Notice to Owner” or “NTO” must be delivered at the start of a new project to protect a company’s valuable mechanics lien rights, but as with anything in the lien laws, the period of time when this notice may be validly sent is not aways clear. This article discusses the thorny and unusual details of Florida’s Notice to Owner rules.

The precise language within Florida Code § 713.06(2) doesn’t seem to present much ambiguity about the timing of a Florida “Notice to Owner:”

The notice must be served before commencing, or not later than 45 days after commencing, to furnish his or her labor, services, or materials…

We’ll discuss and demonstrate in this article, however, that this tiny sentence has spawned a collection of nuanced legal rulings and requirements that could – if you’re not careful – spell trouble for your organization.

You Can Send Florida Notice to Owner’s Early

Florida’s statue setting forth the timing for Notice to Owner deliveries is actually pretty clear about whether notice can be sent early, as it specifically allows the party to send notice “before [or after] commencing…to furnish” labor or materials to a project. Accordingly, Florida courts have considered the NTO requirement properly satisfied when notices were delivered well before any actual furnishing occurred.

This is not the case in many states. Most state laws are not explicit to this point containing language requiring a preliminary notice be sent “within” a certain number of days from first furnishing. Ohio, in fact, has language that suggests early notices are not acceptable within its R.C. 1311.05, requiring notice “within twenty-one days after performing the first labor or work or furnishing [emphasis ours]. An Ohio court recently interpreted this language for the first time and ruled that early notice is not acceptable.

The result was opposite in California based on similar language. The statute in California provides that preliminary notice must be sent not later than 20 days after” first furnishing.

While language is a bit ambiguous in some jurisdictions there is no need to worry in Florida. The statute clearly empowers parties to send preliminary notice as early as they want.

But You Can’t Send Florida Notices Late

While Florida’s statute is clear and liberal with respect to sending notices early, it is the exact opposite when it comes to tardy preliminary notices.

It’s interesting to compare the Florida rule to the California rule because the “not later than” language is exactly the same yet the states reach opposite conclusions.

Most states that have a preliminary notice requirement allow furnishing parties to send these notices “late,” and simply restrict the effectiveness of those notices to the period of time after the tardy notice was sent. This is not allowed in Florida. Florida courts have examined the question and relying on the above-quoted language that the notice must be sent “not later than 45 days after commencing,” have ruled that a late notice to owner is a useless one.

It’s interesting to compare the Florida rule to the California rule because the “not later than” language is exactly the same yet the states reach opposite conclusions. In California, unlike Florida, tardy notices are allowed and do have some legal effect. This is outlined in a previous article written here: Even Late Preliminary Notices May Be Worth Sending.

If you’re furnishing materials or labor in Florida be very aware of your 45 day deadline. You can get a head start and send your notice early, but don’t you dare send it late.

When Is The “First Furnishing” In Florida?

Perhaps the most dangerous detail of Florida’s notice to owner rules is what courts consider to be the “first furnishing.” Since your notice to owner absolutely cannot be sent later than 45 days from first furnishing, the date that marks the “first furnishing” is a critical date.

This becomes a serious problem for those who are furnishing specially fabricated materials on Florida projects. That’s because courts agree that these furnishes creates an “exception” to the state’s general notice requirements. It is described by the Florida Supreme Court in Stunkel v. Gazebo Landscaping Design as follows:

[A] material supplier must deliver a notice to owner within forty-five days of starting to manufacture specially fabricated materials…

So, what does this mean for subcontractors and suppliers dealing with specially fabricated materials? If notice is due within 45 days from the start of manufacturing and late notice is absolutely not required, it means that notices to owner must be furnished on these jobs within 45 days of manufacturing, or else!

This becomes a serious problem for those who are furnishing specially fabricated materials on Florida projects.

This is a serious consequence because most companies don’t realize this and simply send notice within 45 days from first furnishing labor or materials to the project. There is certainly a legal argument that this is an invalid notice, but Florida courts have not actually been called upon to decide this precise question. There is the chance that a Florida court would allow a tardy notice in this instance since the rights to lien on specially fabricated materials pre-installation are a bit unique from those lien rights post-installation.

Nevertheless, since you can’t send notice too early in Florida, and you can certainly file it too late, it’s a best practice for companies specially fabricating materials to get their notices out as early as possible and avoid the argument.