A Notice of Commencement: Commercial Building Requirements

Before the first nail gets pounded or the concrete poured, there’s a vital legal document quietly shaping the foundation of any construction project.

The Notice of Commencement.

Often overlooked, this document plays a powerful role in protecting the rights of owners, contractors and suppliers alike.

Whether constructing a commercial building or remodeling an industrial kitchen, understanding this step can make all the difference.

A Notice of Commencement is a legal document filled out by the contractor, architect or building/land owner before a construction project permit can be issued. This is not a requirement in all states, but all states accept it.

Also referred to as a Letter of Commencement in some areas, its purpose is to ensure transparency and facilitate lien rights for subcontractors, suppliers and other parties working on the project.

Every notice typically includes four key components:

• Project details. Such as the location and work description.
• Key parties involved. The property owner, contractor(s), lender(s) and other interested parties.
• Dates. The construction timeline along with the notice’s filing date.
• Legal protections. This establishes the priority for lien rights, providing protection for subcontractors and suppliers. It also helps owners and lenders track work, obligations and payments.

The Notice of Commencement is effective for one year unless a different expiration date is specified. If a project is going to last longer than a year, a more realistic expiration date should be specified.

How long a notice of commencement is good for is just as important as how long it takes to secure one. Once the document is correctly filled out and submitted to the appropriate office, the time it takes to process and record the NOC depends on the jurisdiction.

In many cases, the notice can be secured immediately or at least the same day.

If filed in person at a county recorder’s office or clerk of court, a copy can be available right away.

Online filings are often processed quickly and can turn around in a single business day.

For mailed filings, the process includes review and recording along with the time it takes for the documents to make their way there and back again through the postal service. This typically results in a wait of three to five business days.

Submitting forms that are incorrect or incomplete may be rejected, requiring corrections and a resubmission, thus resulting in a delay.

Processing times also vary based on the volume of filings or an office’s efficiency. Working with a professional permit expediter such as Express Permits maximizes your time and efforts.

Once recorded, the Notice of Commencement is often immediately effective. However, some states require a copy to be posted at the job site before work begins to ensure compliance with state law.

The rules and requirements for a Notice of Commencement form vary by state. In Florida, for example, filing the notice is mandatory for construction projects exceeding a certain value.

In states where a notice is not required by law, it is considered a best practice because it can safeguard against disputes and ensure lien rights are enforced when looking at how to get a building entitlement and use it properly.

These notices typically file before or shortly after work begins. Timing is crucial, especially in states where lien rights are tied to the notice.

Some states, such as Florida, Georgia, and Michigan, require a Notice of Commencement by law. In Indiana, requirements vary by county, but mechanic’s lien laws still apply, and pre-lien notices may be required depending on the project type.

In general, there are five groups of interested parties who are involved or invested in securing a construction Notice of Commencement.

1. Property owners. The primary individual or company that owns the property looks to notify all parties involved of their legal rights and obligations, to establish the project’s official start date and to identify responsible parties for payment purposes.
2. Contractors. As this group oversees the construction project itself, their interest lies in understanding the timeline and roles that other parties play.
3. Subcontractors and suppliers. In providing labor, services and materials, this group wants to ensure their lien rights are protected and have a clear record of key issues in case payment is delayed.
4. Lenders. Banks and other financial institutions track a project’s progress to ensure lien waivers are properly managed before issuing funds.
5. Legal and title professionals. Attorneys and title companies verify that all required documentation is in place for proper title insurance and lien management.

Most states require a Notice of Commencement to be filed with the county recorder’s office or the clerk of court in the county where the construction project takes place.

If electronic filing is accepted through the county’s official website, this method is preferred because of convenience and speed.

In some jurisdictions, a Notice of Commencement must be visibly posted at the job site and/or distributed to all parties involved, including the property owner, lender, contractors, subcontractors and suppliers.

Always verify a county’s or municipality’s specific requirements, because they will vary. And in most cases where a notice is required, it must be filed before work begins or within a specific number of days after work starts, depending on local laws.

For example, in Florida, the filing goes through the Clerk of Court in the project’s county and must be posted at the job site.

In Michigan, notices are filed with the Register of Deeds in the county where the property is located.

In Ohio, filings go to the county recorder’s office.

Express Permits utilizes the Simplifile system that allows a wide variety of forms to be submitted easily and processed quickly in all 50 states.

Simplifile includes instructions on what you should file and where you can file, taking the confusion out of the process.

Express Permits also offers Express Recorder, a paperless eRecording process that saves clients time and money when filing electronic Notice of Commencement recordings.

More than 2,500 U.S. counties – covering 90 percent of the U.S. population – offer the option to record these documents electronically. By removing the need for paper forms and standing in line at county offices, approval happens quicker, and business continues moving forward.

Reach out to us about how to draft and file a Notice of Commencement or any other questions via our website or by calling (877) 898-9988.