Not too long ago, I dealt with an issue of a subcontractor not timely serving a Notice to Owner. It was not even close. This meant that the subcontractor did not properly perfect its construction lien rights. Of course, the subcontractor could lien and take the chance of not being called out on this. But, this is NOT the route I ever recommend. Why pursue a course that is destined to fail and will be uncovered? It is NOT worth it, because the issue of not properly perfecting the lien by untimely serving a Notice to Owner will be uncovered…typically, on the face of the lien. This does not mean the subcontractor does not have other avenues to pursue, it just means the avenue of securing its nonpayment against the real property through recording a construction lien is not there. Thus, resources need to be devoted to maximizing collection on these other avenues.
Remember, a Notice to Owner needs to be served within 45 days of a subcontractor or supplier’s (anyone not in privity of contract with the owner) initial furnishing. It should be served immediately, without delay.
In fact, the first thing a subcontractor or supplier should do as a matter of course on any job is to pull up the Notice of Commencement. This will tell the subcontractor or supplier whether they will have lien rights or payment bond rights. Knowing this is important so that the subcontractor or supplier knows what to do in the event they are not paid and can start perfecting its rights to maximize the collection of the payment.
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.