What is a Notice of Furnishing?
Notice of Furnishing and Preliminary Notice are synonyms for each other. The term “Notice of Furnishing” is used in Michigan, Ohio, South Carolina and South Dakota while “Preliminary Notice” is used in all other states.
A Notice of Furnishing preserves the lien rights of the party that does not have a direct contract with the property owner. A Notice of Furnishing must be filed by a specified date and is used to inform the General Contractor and property Owner that you have been hired to provide labor, services or material for this particular project.
In Ohio, failing to send a Notice of Furnishing does not defeat your lien rights, but it might limit them.
Who is required to send out a Notice of Furnishing in Michigan?
In Ohio, any party that does not have a direct contract with the property Owner should send a Notice of Furnishing, including subcontractors, sub-subcontractors, laborers, material providers and suppliers.
A General/Prime Contractor only needs to send a Notice of Furnishing at the property Owners request.
When am I required to send a Notice of Furnishing?
In Ohio, a Notice of Furnishing should be mailed 21 days from the first day of furnishing labor and/or materials or when Notice of Commencement is filed, whichever is later.
To avoid risking your Construction Lien rights, we recommend you require your project managers to include a copy of the mailed Notice of Furnishing in every project file.
Who is the Notice of Furnishing sent out to?
The Notice of Furnishing is sent to the property Owner or Lessee and the General/Prime Contractor.
How should I provide a Notice of Furnishing?
You can either hand deliver or mail a copy via certified mail. We recommend to always mail a copy of the Notice of Furnishing, even if already hand delivered a copy. This will help eliminate any risk of it now being received or denial that it was. When you provide a copy of the Notice of Furnishing via certified mail, you have the tracking information as proof of delivery.
Another word of caution, even though emailing is the most common and convenient method of business communication, emailing the Notice of Furnishing is not enough. You must deliver the Notice in-person or via certified mail to meet the legal requirements in Ohio.
Do I have to file a Notice of Furnishing?
No, you do not have to file or record a Notice of Furnishing with any government office (unlike a Notice of Commencement and Construction Lien). Just mail in a copy via certified mail and keep a copy of the tracking information.
What happens if I don't send a Notice of Furnishing in Ohio? Or if I send it late?
If there is a requirement, you better believe there are consequences for failure to meet the requirement.
Since Ohio requires a Notice of Furnishing, failing to provide one can have serious consequences.
Even though failing to provide a Notice of Furnishing does not defeat your lien rights, it might, however, limit how much you can recover, or it may can prevent you from collecting at all. Late delivery of the Notice of Furnishing means you may have limited the amount you can recover to the value of labor and/or materials furnished in the 21 days preceding the service of Notice of Furnishing, and everything thereafter.
Here’s an example:
A subcontractor provides services to a general contractor in Ohio but doesn’t file a Notice of Furnishing within 21 days from the project start date. When the subcontractor finishes the project, the general contractor refuses to pay. So, the subcontractor, in an effort to get paid for his/her work, first mails a Notice of Furnishing and then files a Construction Lien.
Will the subcontractor recover what is owed in full?
Unfortunately for the subcontractor, since the Notice of Furnishing was not delivered within 21 days of the start date, the Construction Lien can only be enforced against the value of work performed AFTER the Notice of Furnishing was sent. In this case, the subcontractor’s work was completed prior to the Notice of Furnishing being sent out, so enforcing the Construction Lien will be challenging and expensive.
What information should be included in a Notice of Furnishing?
Your name and address
Name and address of the property owner
Name and address of the General Contractor or the party that hired you
A description of the type of work that you are providing on the project
First date of work
DISCLAIMER: This publication is for informational purposes only and does not contain legal advice. Individual circumstances vary widely and state laws are continually changing, so readers should not act on the information provided herein and should consult legal counsel for specific legal advice.
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