Contractors and subcontractors who perform work on a property improvement project sometimes go unpaid, even after finishing their contracted work. In these situations, sending a Notice to Owner to the legal property owner is an important step to secure payment. Today, we will discuss what a Notice to Owner is and when to use it. Knowing when and how to properly use a Notice to Owner is important to secure payment as a contractor or subcontractor.
What is a Notice to Owner?
A Notice to Owner sometimes called a Notice of Furnishing, is a legal document that puts a property owner on notice that a contractor or subcontractor is owed money for work performed on their property. This notice establishes a mechanics’ lien on the property if the contractor or subcontractor goes unpaid. A mechanics’ lien gives the sender the right to force a sale of the property to secure payment.
When to Use a Notice to Owner
In most states, contractors and subcontractors have a limited window of time after completing work to send a Notice to Owner to the property owner. This timeframe ranges from 15 to 90 days but is commonly 30-60 days. The notice must be sent within the legally specified timeframe to maintain lien rights.
Contractors and subcontractors should send a Notice to Owner any time they are owed money for property improvements and have not been fully paid, especially if there is a dispute over payment. This preserves their ability to place a lien and establishes a paper trail showing the owner was informed money was due.
Content of Notice to Owner
A Notice to Owner should clearly state key details about the project and the payment owed. This includes:
- Name and address of the property owner.
- Contractor or subcontractor’s name, address, and contact information.
- Address of the improved property.
- Date the labor/materials were first furnished.
- Description of the general nature of the work performed.
- The amount currently due and owing.
Providing complete and accurate information establishes a record of the debt. Some states legally require certain content to be included.
How to Send a Notice to Owner
To properly notify owners, Notice to Owner documents should be sent using certified mail. The labels needed to send letters by certified mail can be purchased online from companies such as Certified Mail Labels or through the United States Postal Service. Sending via Certified Mail provides proof of delivery with a return receipt signed by the recipient.
The Notice to Owner should be addressed to the legal property owner(s) as listed in property records. It is advisable to send duplicate copies via First Class Mail in case the Certified Mail is not accepted. Copies of the notice should also be sent to other interested parties like lenders.
A Notice to Owner is an important legal document contractors and subcontractors should use when owed money for property improvements. Properly preparing and timely sending a Notice to Owner via Certified Mail preserves lien rights. This notice provides critical protection if you go unpaid for work completed.
