SPORE, ORTH,DOMBEY & HART MECHANICS LIEN FILING CHART

Type of Job

Available Claim

Pre-Lien Requirements

Timing of Claim

Filing/Service

Residential

Mechanic's Lien [Lien Limits for Consumer Protection]

None

File within 60 days of Last Date of Work

File with Records, Serve on Owner, Original Contractor & Bank within 30 days.

Private Commercial

Mechanic's Lien

WAS NOTICE OF COMMENCEMENT FILED?

YES-Sub K's & Materialmen must serve Notice of Furnishing (21 days)

NO-Notice of Furnishing NOT required

File within 75 days of Last Date of Work

File with Recorder, Serve on Owner & Original Contractor within 30 days

State Funded

Affidavit for Claim [Against Funds]

WAS PUBLIC NOTICE OF COMMENCEMENT FILED?

YES-Sub K's Materialmen must serve Public Notice of Furnishing (21 days)

NO-Public Notice of Furnishing NOT required

Serve on Sponsoring Authority within 120 days of Last Date of Work

Serve Sponsoring Authority, File with Recorder within 30 days

Federally Funded

Miller Act Claim [Against Payment Bond]

None

All Sub K's & Materialmen without K with Prime Contractor must serve Notice of Claim within 90 days of Last Day of Work

Serve Notice on Primary Contractor within 90 days.  Bring suit against Payment Bond within 1 year of Last Date of Work

      Let's review this in further detail:

Elimination of Old Law Documents and Procedures.  For whatever you knew of the old law, the new law has eliminated all of the ORC §1304 Statements and the attendant similar statements from the subcontractors and the subcontractors' subcontractors, etc., and the Materialman's Certificates. It has also eliminated the ORC §1311.05 Notice to Owner. These documents have been replaced by the use of two completely new documents, the ORC §1311.04 Notice of Commencement and the ORC 1311.05 Notice of Furnishing.

NOTICE OF COMMENCEMENT. O.R.C §1311.04

Obligations of the Owner, Part-Owner or Lessee on Commercial Projects. Under the new law, it is the obligation of the owner, part-owner or lessee of the project to identify and provide all of the necessary information to permit the filing of a mechanic's lien. This information is all compiled in a single document required by ORC §1311.04, known as the Notice of Commencement.

Obligations of the Owner, Part-Owner or Lessee on Residential Projects. Under the New Law there is no obligation or right to prepare a Notice of Commencement on a project that is the subject of a Home CONSTRUCTION Contract. The preparation and filing of a Notice of Commencement on a Home CONSTRUCTION Contract project will not give rise to any obligations of a subcontractor or materialman to prepare or serve a Notice of Furnishing.

A Notice of Commencement is required for projects which are the subject of a Home PURCHASE Contract, however, because most such projects are set up where the owner of the property being improved is acting as the general contractor, the typical version of the NOC would be very complicated because every "subcontractor" of the "general contractor" is in reality an Original Contractor in direct contract with the Owner. This means that the NOC would be required to list every contractor and materialman having a contract with the "general contractor/owner". ORC §1311.04 has been amended to provide that where there is more than one Original Contractor, the NOC need only state that there are Multiple Original Contractors involved in the improvement. The statute also provides that the NOC need NOT be posted on the project. Because a Notice of Furnishing is required to be served on Home Purchase contracts, where multiple Original Contractors are involved, the Subcontractor or Materialman need only serve its NOF on the Owner to preserve its lien rights.

CONTENTS OF  NOTICE OF COMMENCEMENT. O.R.C. §§1311.04 (B)
(1) through (12)

The Notice of Commencement must contain all of the following information:

  1. The legal description of the real property being improved;
  2. A brief description of the improvement being made, while this description should be brief, it should also be sufficient enough to properly describe the improvement without being overly broad;
  3. The name and address of the contracting owner;
  4. The name and address of the owner of the fee simple interest of the parcel or parcels of real property being improved, if the contracting owner is a lessee or a land contract vendee;
  5. The name and address of any "Owner's Designee", the individual, if any, other than the owner, designated to receive all notices, including notices of furnishing;
  6. The name and address of each original contractor;
  7. The name and address of each lending institution providing financing for the project to the "owner";
  8. The name and address of each surety on any bond which guarantees the payment of the original contractor's obligations under the contract for the improvement;
  9. A statutory warning that construction is about to begin and that any person having a mechanic's lien may preserve the lien by providing a Notice of Furnishing to the Owner's Designee and the Original Contractor and the statement that a copy of the notice may be obtained by making a written request, served by certified mail to the named owner, part-owner, lessee, designee or person with whom they have contracted;
  10. The affidavit of the owner, part-owner, lessee or the agent thereof verifying the contents of the Notice of Commencement; and
  11. The name and address of the individual responsible for the preparation of the Notice of Commencement.
  12. FAILURE TO FILE THE NOTICE OF COMMENCEMENT WITH THE COUNTY RECORDER.

Filing of the Notice of Commencement as the Key to Priority and the Obligations of

Subcontractors and Lower Tier Materialmen. The schematic structure of the Lien Law not only requires, but anticipates that a Notice of Commencement will be filed with the County Recorder(s) where the real property to be improved is located. The priority of all mechanic's liens is dependent upon the filing of the Notice. Possibly the priority of the construction mortgage with respect to the possible mechanic's liens is dependent on the filing of the Notice. Specifically, the duty of all subcontractors and materialmen not in privity of contract with the owner, part-owner or lessee to serve a Notice of Furnishing on the owner, part-owner or lessee is totally dependent upon the filing of the Notice of Commencement.

Creation of "Secret Liens" as a Result of the Failure to File a Notice of Commencement. Where there is no obligation to serve a Notice of Furnishing, the absence of the service of the Notices of Furnishing, the owner, part-owner or lessee, the lender and the original contractor are all at peril for the possibility of the filing of "secret liens” which may jeopardize the payments previously made by the owner, part-owner or lessee, the priority of the mortgage filed by the lender and the ability of the original contractor to complete the project, and/or be paid in full for contract amount or even the amount of work performed and/or materials furnished as of the date the project may have be terminated for whatever reason.

Requirements of the Owner, Part-Owner or Lessee with Respect to the Notice of Commencement After the Notice has been Filed with the County Recorder. While there are several requirements of the owner, part-owner or lessee with respect to the Notice of Commencement, for the Notice of Commencement to have any meaning, at minimum it must be filed with the County Recorder, in the county or counties where the real property which contains the project is located. Once this is accomplished several events automatically take place:

Priority of all liens date to the minute of the filing of the Notice of Commencement with the County Recorder(s). This is important to permit the lender to assure itself that it will have priority over other creditors, including mechanic's lien claimants, in the event of a foreclosure of the liens on the property.

All materialmen not in privity of contract with the owner and all subcontractors must serve on the owner, unless a designee has been specified, then on the designee, and all subcontractors and materialmen not in privity of contract with the original contractor must serve a copy of a Notice of Furnishing on the relevant, above referenced party.

Lesser Obligations of the Owner, Part-Owner or Lessee with respect to the Notice of Commencement. While the filing of the Notice of Commencement has these absolute consequences, there are other obligations which are required to be performed, but the consequences of the failure to comply are less draconian. In general, the result of the failure to comply either extends the time period for others to take action or permits others to obtain a

copy of the Notice of Commencement by other means, at the expense of the failing owner. Specifically, there are the following requirements and consequences for the failure to meet the requirements:

The owner, part-owner or lessee must serve a copy of the Notice of Commencement on the original contractor(s). The failure to so serve a copy of the Notice permits the original contractor(s) to obtain the information otherwise contained in the Notice and the owner, part-owner or lessee failing to serve the Notice is liable for the actual costs incurred by the contractor in obtaining the information.

The owner, part-owner or lessee must post and maintain a full copy of the Notice of Commencement in a conspicuous place on the real property described in the Notice during the course of the physical improvement to the real property. The owner, part-owner or lessee's failure to post and maintain the notice on the project, as required, becomes liable to all subcontractors and materialmen who become lien claimants for their actual costs in obtaining the information which would have been contained in the posting.

A subcontractor may make a written request for a copy of the Notice of Commencement on the owner, part-owner or lessee. If the request is properly served the owner, part-owner or lessee must serve a copy of the Notice of Commencement on the requesting party within ten days after the request was received. The failure to serve the Notice on the requesting party within that time period extends the time period for the requesting party to serve a Notice of Furnishing on the necessary parties for a full twenty-one days after the receipt of the Notice by the requesting party.

Requirements of the Original Contractor and Prime Subcontractor with Respect to the Notice of Commencement. In addition to the duties of the owner, part-owner or lessee with respect to the Notice of Commencement in relation to subcontractors and lower tier materialmen, original contractors and prime subcontractors may have duties with respect to their lower tier subcontractors and materialmen. These duties are as follows:

A subcontractor may make a written request for a copy of the Notice of Commencement on the original contractor. If the original contractor has been served with a copy of the Notice of Commencement by the Owner and the request is properly served the original contractor must serve a copy of the Notice of Commencement on the requesting party within ten days after the request was received. The failure to serve the Notice on the requesting party within that time period permits the requesting party to obtain the information otherwise contained in the Notice and the original contractor failing to serve the Notice is liable for the actual costs incurred by the subcontractor or materialman in obtaining the information.

A subcontractor or materialman not in privity with the original contractor may make a written request for a copy of the Notice of Commencement on the contractor employing or purchasing from them. If that contractor has been served with a copy of the Notice of Commencement and the request is properly served that contractor must serve a copy of the Notice of Commencement on the requesting party within ten days after the request was received. The failure to serve the Notice on the requesting party within that time period permits the requesting party to obtain the information otherwise contained in the Notice and the contractor failing to serve the Notice is liable for the actual costs incurred by the subcontractor or materialman in obtaining the information.

NOTICE OF FURNISHING. O.R.C §1311.05

The second half of the obligation of providing full notice to the necessary participants in a construction project places a burden on the subcontractors and lower tier materialmen. This obligation is the preparation and service of a Notice of Furnishing on the owner, part-owner or lessee and in many circumstances the original contractor. There is no obligation of the original contractor to serve a Notice of Furnishing on the owner, part-owner or lessee. This makes sense because the purpose of the Law is to provide notice to the owner, part-owner or lessee and the original contractor where appropriate, of the identity of lower tier contractors and materialmen. Where there is a direct contract between the owner and contractor or materialman, or an original contractor and lower tier subcontractor or materialman, there is no necessity or further notice as the requirement of notice is met by definition.

Contents of the Notice of Furnishing. The Notice of Furnishing is intended to be a simple document, but one which cannot be readily prepared in the absence of a copy of a Notice of Commencement, as the Notice of Commencement contains many of the elements for the preparation of the notice of Furnishing. Specifically, the Notice of Furnishing is to contain the following information:

  1. The Notice of Furnishing is to be addressed to the owner, part-owner or lessee of the project, not necessarily the fee simple owner of the real estate, or the Owner's Designee identified in the Notice of Commencement;
  2. If the subcontractor or materialman does not have a direct contract with the original contractor, a copy of the Notice of Furnishing must also be addressed to the original contractor as identified in the Notice of Commencement (Note: where more than one original contractor exists for a given project, it is only necessary to serve the original contractor which is the original contractor in the chain between you and the owner) ;
  3. The identification of the contractor to whom the party providing the Notice of Furnishing is in contract and a statement that the party is performing certain labor or furnishing certain materials such contractor;
  4. 4. A statement that the labor performed and/or materials furnished are being provided in connection with the improvement to the real property, and a description of the real property sufficient to reasonably identify the property;

Practice Pointer: The statute provides that any description which reasonably identifies the property is sufficient. The statute Furnishing should identify the Notice of Commencement either by the Volume and Page of its recordation with the County Recorder or by attaching a copy of the Notice of Commencement. This has been deleted from the status, however, many of the forms still being used have blanks for the recording information. If there is any possible confusion by the owner (i.e. a multi-phase project) the easiest method to identify the project for the owner would be to simply attach a complete copy of the Notice of Commencement as an exhibit to the Notice of Furnishing. This is not required, however, your main goal is not to give yourself mechanic's lien rights, but to be paid when your invoice is due, therefore, extra information can possibly help you.

  1. The first date on which the party providing the Notice of Furnishing performed labor or provided materials or will perform labor or provide materials;
  2. A statement which provides, "Warning to Owner: This Notice is required by the Ohio Mechanic's Lien Law. If you have any questions about your rights and duties under these statutes you should seek legal assistance to protect you from the possibility of paying twice for the improvements to your property."
  3. Hawaiian Pool Builders, Inc. name and address;
  4. The Notice of Furnishing must be signed by you or an officer of Hawaiian and the name and address of the party signing must be included printed; and
  5. The date on which the Notice of Furnishing was signed by you or an officer of Hawaiian.

Service of the Notice of Furnishing. O.R.C. §1311.19 (B) Once a Notice of Commencement has been filed with the County Recorder(s) for the county(ies) in which the project is located, the subcontractor and lower tier materialman desiring the preservation of their rights to file a mechanic's lien must serve a Notice of Furnishing under the following rules:

Residential Projects: Home Construction Contracts-No Notice of Furnishing is required or permitted to be served on any party;

  1. Home Purchase Contracts-Notice of Furnishing is required to be served on the Owner/Part-Owner/Lessee where the contractor or materialman serving the Notice is not in privity of contract with the Owner/Part-Owner/Lessee, and also served on the Original Contractor when the contractor or materialman is not in privity of contract with the Original Contractor, except in the circumstances where the project involves Multiple Original Contractors and the Notice of Commencement only references Multiple Original Contractors, the Notice of Furnishing need only be served on the Owner/part-Owner/Lessee or its Designee.

Practice Pointer: If the project you are working on appears that it may be a residential project, be sure that you check to determine whether the project actually fits within the statutory definition of a residential or commercial project.

Commercial Projects:

  1. Unless the lien claimant is in direct privity of contract the owner, part-owner or lessee, a copy of the Notice of Furnishing must be served on the owner, part‑owner or lessee or its Designee as listed in the Notice of Commencement;
  2. If the lien claimant is in privity of contract with neither the owner, part-owner or lessee or the original contractor, a copy of the Notice of Furnishing must also be served on the original contractor at the address listed in the Notice of Commencement;
  3. To fully protect its lien rights, a lien claimant must complete service of all required copies of its Notice of Furnishing within twenty-one days of the first day it performed labor or provided materials for the project;

Practice Pointer: No Notice of Furnishing is required to be served on any party until a Notice of Commencement has been filed with the County Recorder. However, if a Notice of Commencement is filed after you begin to provide labor or materials for the project, unless you make a continuing demand for a copy of the Notice of Commencement, the owner, part-owner or lessee is under no obligation to provide the copy to you. As soon as you have been hired to provide labor or materials for the project ask the contractor that hired you for a copy of the Notice of Commencement. Generally, if they have a copy they will hand it to you at that time. If so, immediately serve your Notice of Furnishing on all required parties. If they do not have a copy of the Notice of Commencement have them provide you with the name and address of the owner, part-owner or lessee and promptly send a written, continuing demand for a copy of the Notice of Commencement to the owner, part-owner or lessee by Certified Mail. If you have reason to doubt that the contractor gave you the proper name and address, you should first question whether you want to work on their project, if you still do, you should take further steps to locate the Notice of Commencement, either at the local Builders Exchange, the County Recorder's office or physically go to the job site and look for the posted copy of the Notice of Commencement, copying down the relevant information, at least the name and address of the owner, part-owner or lessee, the name and address of the Owner's Designee, if any, the brief, description of the project, and the name of the original contractor(s). Promptly send the written, continuing demand as described above.

  1. If no Notice of Commencement has been filed with the County Recorder prior to the commencement of the performance of labor or furnishing of materials by the lien claimant, the time period for serving a Notice of Furnishing is extended one day for each day that a Notice of Commencement has not been filed after such lien claimant commenced the performance of its labor or furnishing of its materials to the project;
  2. If the lien claimant has served a written, continuing request for a copy of the Notice of Commencement on the owner, part-owner or lessee and the owner, part-owner or lessee fails to serve the Notice of Commencement on the requesting lien claimant within ten days following the date of the service of the request, the time period to serve the Notice of Furnishing on all required parties is extended until twenty-one days following the service of the Notice of Commencement on the requesting party;
  3. There is no duty to serve a copy of the Notice of Furnishing on a lender or a surety listed in the Notice of Commencement.

Unlike service of other documentation under the Ohio Mechanic's Lien Law, ORC §1311.19 (B) provides that if service of the Notice of Furnishing is attempted by certified mail, service is deemed complete upon mailing. If the service is attempted upon an owner, part owner, or [sic] lessee or designee, at the address contained in the notice of commencement...and if the notice, affidavit, or other document is returned unclaimed or refused, service is complete when it is first attempted.

OBLIGATIONS OF THE OWNER, PART-OWNER OR LESSEE AND THE ORIGINAL CONTRACTOR WITH RESPECT TO THEIR RECEIPT OF THE NOTICE OF FURNISHING.

As the subcontractor and lower tier materialman is required to provide its Notice of Furnishing to the appropriate parties, it is incumbent upon those parties to do more than just receive the document. The purpose of the document is to provide them with notice of all of the contractors and materialman which may have lien rights. It is appropriate that the owner, part-owner or lessee and the original contractor keep an exhaustive list of all such parties. Further, it is in their best interests that such a list be used at every draw request to assure that payments have been made to those on the project by withholding payment from each level of contractor until lien waivers are received from the lower tier participants.

PREPARATION, FILING AND PERFECTION OF THE MECHANIC'S LIEN. O.R.C §1311.06

Required Documentation. Once a contractor or materialman's right to file a mechanic's lien is established, the only remaining documentation is the Affidavit for Mechanic's Lien. The Affidavit for Mechanic's Lien must be made upon the personal knowledge of the affiant and contain the following information: The amount due over and above all legal set-offs; A description of the real property to be charged with the mechanic's lien; The name and address of the person to whom the labor or work was performed or material was furnished;