What is a Notice Of Non-Responsibility
A Notice of Nonresponsibility is a legal document used by property owners in the United States to protect themselves from liability for nonpayment for services done to improve that property. The laws regarding a property owners liability for nonpayment vary from state to state, but in most jurisdictions, construction companies and other service providers are allowed to claim a lien, usually called a mechanic's lien or construction lien, on a property they have worked to improve, but for which they have not been paid. A notice of nonresponsibility can, in some cases, protect property owners from such liens.
BREAKING DOWN Notice Of Non-Responsibility
Notices of nonresponsibility vary from state to state, but in general they are forms filled out by a property owner, filed with the county clerk, and posted at the owners property, declaring that the property owner is not liable for work done on the property if the property owner has not directly contracted for that work to be done. Fon instance, California state law allows for property owners or property managers to fill out and file notices of nonresponsibility “when a tenant commences construction of improvements on premises leased from the owner, to declare the property owner is not responsible for any claim arising out of the tenant improvements being constructed on the property.”
For example, under California law, if a property owner has rented out property to a tenant, and then the tenant contracts with a construction company to improve the property without the owner's consent, the property owner has ten days to file a notice of nonresponsibility with the county clerk’s office and post it at the property site. If used correctly, such a notice can protect the property owner from a construction lien if the tenant fails to pay the construction company for services rendered.
Some property owners think erroneously that notices of nonresponsiblity are more powerful than they actually are. In most jurisdictions, these notices will not protect property owners against construction liens for work done that they are aware of or have themselves commissioned. In addition, they will not protect property owners if the proper protocol for filing the notices is not followed.
Notice of Nonresponsibility and Construction Liens
Construction liens, also known as mechanics liens, are a commonly filed by contractors when they have not been paid for work they have completed. The priority of multiple liens is usually determined by the order in which the work has commenced.