A notice to owner is a document sent by you, as a potential lienor, to a property owner. It informs him that you will look to him for payment in the event that you are not paid by the general contractor. The NTO must be received by the property owner no later than 45 days from your first labor, services, or material delivery on the jobsite. Failure to serve a Notice to Owner, or serving one improperly, relinquishes your right to lien the property.
FREQUENTLY ASKED QUESTIONS
WHAT IS A NOTICE TO OWNER?
WHO MUST SERVE A NOTICE TO OWNER?
Anyone involved with a construction project who is not dealing directly with the property owner is required to serve a Notice to Owner in order to protect his lien rights. This includes material suppliers, sub-contractors, and sub-sub-contractors. If you are in privity with the property owner, that is if you have contracted with him directly, it is not necessary for you to serve a Notice to Owner in order to perfect a lien on his property. There are two exceptions: if you are a laborer (performing your own labor on the site), or if you are performing services or furnishing materials for site improvements, you are not required to serve a Notice to Owner.
TO WHOM DO I SERVE A NOTICE TO OWNER?
Generally, you are required to serve your Notice to Owner to the property owner and all other parties in the chain of contract between you and that property owner. In addition, any other party specified on the Notice of Commencement, such as a lender, owner's agent, surety, or a title company must also be served. You are not legally required to serve a Notice to Owner to anyone with whom you have a direct contract, but it is a good practice to send a courtesy copy by regular mail.
WHAT DOES "SERVED" MEAN?
The Construction Lien Law specifies 4 methods for properly serving a Notice to Owner: Certified Mail - postage prepaid, return receipt requested; the signed return receipt card (green card) is your proof of service. If the certified mail is returned marked "unclaimed", "refused", "not forwardable", or is otherwise not delivered or deliverable through no fault of the person serving the item, the Notice to Owner is considered served as of the date of mailing. Actual Delivery - by delivery services such as Federal Express, UPS etc.; the signed delivery receipt is your proof of service. Hand Post - by posting a copy of the Notice to Owner on the jobsite; an affidavit stating that you've done so, signed by you and notarized, is proof of service. Before hand-posting, you must first attempt to serve the Notice to Owner by certified mail or actual delivery. Fax - applies only to service of Notices to Owner to general contractors, lenders etc. when the fax number is specified on the Notice of Commencement; the fax confirmation slip showing the fax number, date, and time is proof of service. A Notice to Owner sent to the property owner via fax is NOT properly served.
IS THERE A STANDARD RELEASE OF LIEN FORM?
The Construction Lien Law provides an approved release of lien form, and a property owner or general contractor cannot require you to furnish any release of lien other than the approved form. You may also condition this release or lien on payment and clearance of funds
WHAT IS A CLAIM OF LIEN?
A Claim of Lien is a document that gives notice of your claim against a piece of property for the amount of your contract (including unpaid finance charges) for improvement of that property. You must record your Claim of Lien with county clerk's office no later than 90 days from your last delivery of material or work done on the jobsite (punch list or repair work does not extend this time period) and serve the property owner with a copy within 15 days of the date you recorded the claim. The lien remains effective for 1 year from the recording date unless you proceed with an action to foreclose the lien, voluntarily release it, or if the property owner files a Notice of Contest of Lien. The law does not provide for renewals or extensions of liens.
HOW DO I ENFORCE A CLAIM OF LIEN?
In order to enforce a lien, you must file suit against the property owner within 1 year of the recording date of your Claim of Lien requesting a judgement recognizing the lien and ordering the sale of the owner's interest in the property. Once the owner's interest is sold, any mortgages or liens prior to yours will be satisfied before you receive payment. If the amount remaining is greater than the amount of your claim, you are entitled to recover your attorney's fees. In the event you are not awarded a judgement, you must cover the property owner's attorney's fees.
WHAT IS LIENABLE?
The interest in a piece of property owned by the person contracting for the work being done on that property is subject to liens. When the person contracting for improvements is a tenant, the landlord's interest in the property can be liened, unless the lease agreement specifically states that the landlord's interest in the property is exempt from liens, or the tenant is a mobile home owner leasing a lot in a mobile home park. Public property is NOT lienable. However, if you have contracted for an improvement of public property which is a condition of a private owner's permit to improve his own property (i.e. paving a turn lane from a public road into a privately owned subdivision), the privately owned property is subject to liens.
WHAT CAN I DO IF I AM WORKING ON A PUBLIC PROPERTY?
If you are furnishing materials and/or labor for improvement of a public property and you are not dealing directly with the general contractor, you must serve a Preliminary Notice (same format and served in the same manner as the Notice to Owner) to the general contractor, the public authority that owns the property, and the surety company that is carrying the payment bond on the project within 45 days of your first labor, services, or material delivery on the jobsite. If you are working directly for the general contractor, you are not required to serve a Preliminary Notice. In the event that you are not paid by the general contractor, rather than filing a Claim of Lien against the property, you must serve a Notice of Nonpayment to the general contractor and the surety company within 90 days of your last labor or material delivery. This notice is not recorded with the Clerk of Court's office, but is served in the same manner as the Preliminary Notice or Notice to Owner, and it informs both parties that you will be relying on the bond for payment. No action may be initiated unless both the Preliminary Notice (if you were required to serve one) and the Notice of Nonpayment have been served. No action of any kind may be initiated against the public authority that owns the property.