WHAT IS A NOTICE TO OWNER (NTO)?
A Notice to Owner is a document sent by you, as a potential lienor, to a property owner. It informs the property owner that the failure to insure you are properly paid could result in a lien against the property and the owner paying twice in the event 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.
WHO MUST SERVE A NOTICE TO OWNER?
If you are providing labor, services, or materials for a construction project and you do not have a direct contract with the property owner, you are required to serve a Notice to Owner in order to protect your lien rights.
This includes material suppliers, sub-contractors, sub-sub-contractors, and laborers. If you are in privity with the property owner, that is if you have contracted with the property owner directly, it is not necessary for you to serve a Notice to Owner in order to perfect a lien on the property owner.
UPON 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, fax, email, etc..
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 at the job site; 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 the Notice to Owner on the property owners, 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.
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. Upon the filing of a Notice of Contest of Lien, a lienor must file a lawsuit to enforce the lien within 60 days. The law does not provide for renewals or extensions of liens.