Important Types of Construction Notices

Legal Article

Important Types of Construction Notices

There are many situations before, during, and after a construction project that may require the general contractor or property owner to send, file, or request a notice. Some of these occurrences are necessitated by law while other notices must be filed because of contractual obligations. Further, construction notices can be administrative, voluntary, or required depending on your individual situation.

Certain construction notices can be extremely complex. In addition to being inherently complicated, the sheer number of construction notices that are each used for different situations makes understanding when to use a specific notice extremely difficult. Our guide seeks to provide an introduction to all relevant and common notices both general contractors and property owners may encounter during a construction project.

Lien and Bonds Claim Rights Notices

The construction notices discussed in this stage focus on notices exchanged between entities that relate to lien rights on a project. However, what makes these types of notices difficult is that whether these notices are required, when they must be sent, how they must be sent, and who they must be sent to cannot be properly answered without understanding the specifics of an individual’s situation. While the construction notice requirements differ depending on the location and type of project you are working on, understanding what these types of notices do is extremely useful.

Preliminary Notice

A preliminary notice is primarily used to give people in charge of information about the construction project. In most cases, a preliminary notice will detail the work on the job and be given to a general contractor or property owner at the beginning of a project. In addition to informing those in charge of the actual work being done on the project, preliminary notices are vital to ensure that those performing the actual work get paid in full and on time. Additionally, in many states, to file a mechanics lien or make a bond claim, a contractor, supplier, or other workers must utilize a preliminary notice. Finally, people also refer to preliminary notices as:

  • Pre lien
  • Notice of furnishing
  • Prelim
  • Notice to owner (NTO)

While preliminary notices state what work must be done on a project, the main reason why they are so useful to both contractors and property owners is that they ensure everyone gets paid. This may seem odd considering property owners sometimes try to low ball or not pay a contractor after they have already completed work. While this is true, most property owners want to avoid costly and time-consuming legal claims such as a mechanics lien. Thus, a preliminary notice incentivizes a property owner to pay the contractor on time. Additionally, the contract also gives them detailed information about what they are actually paying for.

Finally, there are a few additional benefits contractors, subcontractors, other construction professionals, and property owners can gain from using a preliminary notice including.

  • Improved Communication
  • Professionalism
  • Working to Balance Risk

Notice of Intent to Lien

Suppliers and contractors use this specific notice when they have not received payment for their work or materials. While extremely useful, many people confuse it with other common construction lien notices. When using a notice of intent to lien, you should send this document around ten days before filing the lien. Legally, you must only use these documents in a few states. However, it is a good idea to utilize this document even if you do not have to as you are warning the other party that you will file a lien if you are not paid immediately.

People most commonly confuse a notice of intent to lien with a preliminary notice and mechanics lien. You will normally send preliminary notices before you begin a job while you would only send a notice of intent to lien after you have not received payment. A notice of intent to lien is also different from a mechanics lien. These documents differ as the notice of intent to lien is the first step in the lien process while the mechanic’s lien is the actual document that helps you receive payment.

Notices that are Required and Exchanged Within Construction Contracts

In many cases, construction notices focused on construction contracts help the parties administer the work of the project. Because these notices help facilitate the work, they also help entities assert their claims and manage risk. As most construction contracts are long and fairly complex, it can be difficult to know what notices you should use.

Notice to Proceed

A general contractor usually sends a subcontractor a notice to proceed that urges the subcontractor to begin working. In general, construction projects frequently experience costly delays. Delays cost contractors money at every level. When delays do occur, they can quickly lead to disputes about when work could have and should begin.

A notice to proceed is useful in these situations as the document helps to give more certainty to subcontractors on when they can begin working again. The notice to proceed achieves this goal by providing a clear indication of when a party’s project will begin.

Request for Information Notice

As construction contracts require multiple entities working together, it takes a lot of information to properly complete a construction project. The request for information notice works to facilitate the flow of information. Further, you may have to submit this document under state laws or by contractual obligations. Though straightforward, you may need to send this document to bill on a job or protect your lien rights.

Change Order Notice

A change order notice can require contractors to change their work without having them consent to these changes. During certain construction projects, a contractor may not agree to changes concerning the scope, costs, or requirements of the project. However, the general contractor may have the ability to issue a change directive without giving notice to the subcontractor. Additionally, the subcontractor can usually not challenge these changes.  

Stop Work Notice

Parties will use a stop-work notice to inform a general contractor, property owner, or other parties that if they do not make payments, work will be stopped.

Notice of Termination

For a variety of reasons, a property owner or general contractor may want to terminate one of the contractors. Property owners and general contractors can usually terminate an employee without legal recourse. However, you will always need to provide a notice of termination to protect your interests.

Retention Notice

In construction, it is common for property owners and general contractors to hold a portion of each paycheck. In most cases, a contractor must fill out and submit a retention notice to have their retainage money released.

Contact our Law Office for More Information

At Antonoplos & Associates, our Washington DC construction attorneys can help construction company owners, contractors, subcontractors, material suppliers, architects, designers, and property owners with a wide range of services before, during, and after a construction project. For more information on the most important types of construction notices, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Finally, for more information on construction law, check out our blog.