A notice of completion is a legal statement submitted by a contractor to inform interested parties that construction work on a project is complete, triggering a deadline for filing liens. It is advisable to file a notice of completion even if it is not required by law, as it provides protection for the contractor and project owner. The notice includes project information, and interested parties must file liens within a set period of time. Without a notice of completion, interested parties have a longer time to file liens, adding uncertainty to the project.
A notice of completion is a formal legal statement that a contractor or representative submits to alert interested parties that construction work on a project is complete. This triggers a filing deadline for any liens that subcontractors and others want to file in connection with the project. If they do not exercise their rights within the time allowed by law, they lose the opportunity to do so. Completion notices are not required in all cases, but may be advisable even where their use is not required by law, as they may provide protection for the contractor and project owner.
To file a notice of completion, the contractor must obtain the correct form from the clerk’s office. Typically, the clerk who oversees building permit filings is the source of this form, although this may vary by jurisdiction. The online form is also accessible in many regions through a website maintained by the building office. Generic shapes may be permissible, but this is not always the case, and it’s a good idea to check first.
The notice of completion includes information about the project, such as the nature of the construction and the location, so there can be no confusion about which project is being discussed. The contractor lists his name and contact information and provides owner information, if the owner is a different person. The secretary will post the notice of completion after receiving it and verifying the information. In some regions, newspapers publicize this information for the benefit of members of the public. In other regions, interested parties may need to contact the secretary to see if a notice of completion has been filed.
On the effective end date, the deadline begins to pass. Anyone who wants to place a lien on the project must do so within a set period of time, such as 30 days. A subcontractor who was not paid, for example, would file a lien against the project. Until you are paid, the lien will remain in effect. It will be impossible to transfer title, which can be a major problem if the owner plans to sell the finished project.
Without a notice of completion, interested parties have a much longer time to file liens. It can be three months or more, and it can add a note of uncertainty to the project. For homeowners intending to sell, it is critical to ask the contractor to file a notice of completion so that the clouds on the title surface immediately, rather than in the midst of sensitive financial negotiations.
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