In construction, a notice of commencement is a document the property owner records in the county land records before work begins, naming the owner, the general contractor, the lender, and any payment bond surety so that subcontractors and suppliers know where to send legal notices. Not every state requires one, but where it’s required or encouraged, filing it properly is what stands between an owner and the risk of paying twice for the same work.
Why Owners File One
The practical reason to care about this document is money. Without a recorded notice on file, an owner who pays the general contractor in full has no reliable way to confirm that the subcontractors and suppliers below the contractor also got paid. If the contractor pockets the money and stiffs the people down the chain, those unpaid parties can file mechanic’s liens against the property. The owner is then stuck choosing between paying those claims a second time or litigating them.
A properly recorded notice sets up the payment procedures that prevent this. It triggers the requirement that the general contractor deliver a final affidavit listing every subcontractor and supplier and confirming they’ve been paid before the owner releases the final check. The statutory warnings printed on the forms are blunt about the consequences of skipping the filing: you may end up paying twice for improvements to your own property.
Does Your Project Need One
Most states don’t require this filing at all. Roughly seven states mandate it for at least some construction projects, including Florida, Georgia, Louisiana, Michigan, and Ohio. A few others, like Iowa, require the document only for residential work. Some states treat the filing as optional but give owners who file one a strategic advantage, because recording it shortens the window subcontractors have to send preliminary notices and file liens.
Dollar thresholds vary too. Some states require the filing for any project that could give rise to a mechanic’s lien, regardless of cost. Others only trigger the requirement when the contract price crosses a threshold, commonly somewhere in the $2,500 to $5,000 range. Because the rules differ sharply between jurisdictions, the only reliable way to confirm what applies to your project is to check with the county recorder’s office or a construction attorney before work starts.
What Goes on the Form
The form collects enough detail for any subcontractor or supplier to identify the project’s key players and send legal notices to the right addresses. Fields vary by state, but most forms require:
- The legal description of the property, taken from the deed. A street address alone is not sufficient; you generally need subdivision, lot and block, or similar identifiers, which the county property appraiser’s website usually provides.
- The owner’s name and address, matching the entity that actually holds title.
- The general contractor’s name and address.
- The name and address of any lender financing the construction.
- The surety’s name and address if a payment bond is in place, so lien claimants know where to file a bond claim.
- A project description specific enough for a lien claimant to identify the work.
- The expiration date through which the notice remains effective.
Accuracy matters more than people expect. If the owner’s name doesn’t match corporate registrations, or the legal description is wrong, the document may not hold up in a lien dispute. If the project has a payment bond, a copy must be attached when the notice is recorded; forgetting the attachment can strip away the protections the bond was supposed to provide. The owner (or an authorized agent) signs the form, and the signature must be notarized before the county recorder will accept it.
If something changes after recording, such as a new general contractor replacing the original or a change in the owner’s address, record a corrected notice. An outdated address on file can mean you never receive a legal notice you were entitled to, which costs you the protections the filing was designed to give you.
Recording the Document and Posting It On-Site
Once the form is signed and notarized, you submit it to the county recorder’s office (sometimes called the clerk of court). Most offices accept filings in person, by mail, or through electronic portals, and recording fees vary widely by jurisdiction. After processing, you receive a certified copy stamped with the recording date and instrument number.
In states that require posting, the certified copy must be displayed at the construction site where workers can see it. The point of posting is so that subcontractors and suppliers arriving on-site can get the information they need to protect their lien rights without digging through public records.
One common misunderstanding is that the filing has to happen before you pull the building permit. In most places, it doesn’t. The hard deadline is tied to inspections, not the permit application. Before the first building inspection after the permit issues, the inspector will ask for either a certified copy of the recorded notice or proof that it has been filed for recording. If you can’t produce it, the inspection fails and work stops. Preliminary site activity like land clearing or temporary utility hookups can usually proceed before the filing, but the first structural or code inspection is where the requirement bites.
How the Filing Shapes Lien Priority
The most consequential thing this document does is set the priority date for mechanic’s liens. In states that use the system, every lien filed by a contractor, subcontractor, or supplier “relates back” to the date the notice was recorded. A subcontractor who starts work six months into the project gets the same lien priority as one who broke ground on day one, because both liens are treated as attaching on the recording date.
That relation-back rule determines who gets paid first if the project collapses. Any mortgage or lien recorded before the notice takes priority over the construction liens. Any mortgage or encumbrance recorded after is subordinate. Construction lenders care intensely about this sequence: a gap between loan closing and recording can create a priority dispute no one wants to litigate.
Subcontractors and suppliers also use the recorded information to send preliminary notices, sometimes called a notice to owner or notice of furnishing. These preliminary notices preserve their right to file a lien later, and the recorded document tells them exactly where to send them. When a notice is on file, it often tightens the deadlines lower-tier parties have to complete each step of the lien process, which is part of why some states make the filing optional but reward owners who do it: the document shifts timing pressure onto potential lien claimants.
Expiration and Keeping It Current
The filing doesn’t last forever. In most states that require it, the default effective period is one year from the recording date. If the construction contract calls for a longer completion period, you can specify an extended expiration date, but you need to do that before the original is recorded.
Letting the notice expire mid-project is a serious problem. Payments made to the contractor after the expiration date are treated as improper payments under the applicable lien statutes, which strips the owner of the protections the filing was supposed to provide. You end up back in double-payment territory: paying the contractor after expiration doesn’t count as proper payment, and unpaid subcontractors can still come after the property. If a project is running long, record a new or amended notice before the original expires. Trying to patch the gap afterward is difficult.
Closing It Out When the Job Ends
When construction is finished and everyone has been paid, the owner should record a notice of termination to formally close the document. Leaving an active filing in the public records after the project ends creates problems that surface when you try to sell or refinance.
Terminating generally requires recording a new document that references the original, states that all lien claimants have been paid in full, and specifies the termination date. In most jurisdictions the termination doesn’t take effect immediately on recording. A waiting period, often 30 days, gives any remaining potential lien claimants time to assert their rights before the window closes. You typically have to attach the contractor’s final affidavit confirming that everyone in the payment chain has been paid, and you must serve a copy of the termination on every subcontractor or supplier who sent a preliminary notice during the project, except those who already signed a final waiver and release of lien. Knowingly filing a fraudulent termination or a false affidavit creates personal liability to any lien claimant harmed by the misrepresentation.
This matters for sales and refinancing because an active filing shows up in a title search, and title insurers list it as a title exception. That exception signals to a buyer or lender that the property is exposed to potential mechanic’s lien claims that could take priority over their interest. Buyers push back; mortgage lenders push back harder. An unexpired notice on title can stall or kill a closing. To clear it, you generally need the recorded termination, a contractor’s final affidavit, and lien waivers from every subcontractor who sent a preliminary notice. The title company may also require an indemnity agreement. If you’re planning to list a property where construction recently finished, start this process well before a buyer is under contract.
Tenant Improvements and Landlord Exposure
One scenario is worth flagging because it catches landlords off guard. When a commercial tenant contracts for improvements to leased space, the tenant is considered the owner of the leasehold interest being improved, and the tenant, not the landlord, should be listed on the notice as the owner, with a notation that the interest is a leasehold.
If the landlord signs the notice instead of the tenant, lien claimants can argue that the landlord was the contracting party, which exposes the landlord’s fee simple interest to liens for work the landlord never ordered. To guard against this, the lease should state that the tenant’s contractors may not lien the landlord’s interest for tenant-initiated work. In some states, the landlord must furnish a verified copy of that lease provision within a set period after a contractor demands it, and failing to do so can void the protection. Landlords who want to stay ahead of this should require tenants to submit any proposed notice for review before recording.