Paperwork. ugh.
Paperwork. ugh.
What the NTO does is put you in privity with the owner. This means that the owner acknowledges you are doing work on his property. It allows the sub to be in privity with the owner just like the contractor. If the job is over $2500 the job needs a notice of commencement. This is filed with the building department and placed into official records at the court house. This is the document that places your book mark on the who owes who list of the property. It is normally done by the one that pulls the permit.
Property taxes take priority to all mortgages and loans registered in the official record book on a specific piece of property. A property tax lien will prime any other liens or mortgages. If the property is in tax trouble the ownership could transfer before everything gets completed. What the Notice of commencement does is put the public on notice that there is work being performed on the property and a date is provided. This document gives notice that you have priority over any subsequent liens (perhaps) but not property taxes.
The beginning of what you have to remember is:
1 Notice to owner
2 if over $2500 get a notarized Notice of Commencement filed with the building department with permit and with official records.
3 Get the job done and get paid giving a release.
If the job isn't being inspected or contracted with a permit, it's illegal. A very good defense in a court of law to NOT enforce a contract would be that it is illegal. No permit, no recourse irregardless of whether a Notice to Owner is filed or not.
The state of Florida even specifies type sizes (print) on certain parts of the Notice to Owner. If these aren't adhered to it's not a recognized NTO.
If you are relying on a Notice to Owner to get you paid, don't. Its done at the very beginning of a job. If the job is going South before you start, there is a problem already. It does tell whomever you are working for you know what is required. It is a courtesy to the owner. It will take several hours off the legal fees. It will make the contractor do more paperwork and get things notarized which is a time consuming activity and his job. It's a beginning and can cost anywhere from $4 and up, depending on the local cost structures at the building department and public records.
Just because you didn't file a NTO doesn't mean you cant sue. It does mean you cant use the Notice of Commencement date and if the property is transferred it might mean loosing the deep pocket and perhaps your ability to convince the judge you deserve to get paid because you didn't do proper notice. Its called a defense and is very convincing to judges that enforce the laws. That's when you learn about paying the other guys legal fees.
I have found it very educational to do a real estate class. It helps you understand what is involved in property. It gives you a very VERY light exposure to Florida statutes, public records, property rights etc. The F.S. aren't that hard to read ,surprisingly, and can be very informative.
Here is a site on NTO
http://www.myflorida.com/dbpr/pro/cilb/documents/florida_lien_law.pdf
