QUESTION: We have a construction company that was recently merged. We file NTO’s on all projects. Do they need to be refilled with our customers under the new company’s name?
ANSWER: I could not find a case directly on point. While others have opined a new NTO is not needed, what could be wrong with sending another NTO, by certified mail, advising the owner and general contractor about the new name of your company? The cost of sending the second NTO is minimal.
Substantively, this scenario is analogous to a change in the name of an owner. Remember, an NTO gives lienor’s name and address, a description sufficient for identification of the real property, and the nature of the services or materials furnished or to be furnished”. The statute only dictates that such notice be sent to “the owner.” Additionally, if the owner has designated a person “in addition to himself or herself to receive a copy of such lienor’s notice” (an owner’s designee) then the subcontractor or supplier must also serve the preliminary notice upon this party as well.
Since the statute only provides that the notice must be given to the property owner (and owner’s designee), and does not address what a lienor should do if the property changes hands, no statutory guidance is provided as to what should occur in that instance. In the event of a property transfer, multiple questions arise. 1) Does the potential lien claimant’s role in the project change for the purposes of notice requirements if the property changes hands (such that the potential lien claimant no longer has a contract with the property owner)?; 2) If the potential lien claimant was already required to provide notice, should the lien claimant give the notice to the party who owned the property prior to the statutory deadline for providing the notice only, or should the lien claimant also give notice to the property owner who owns the property at the time the lien is to be filed? A recent case clarified the Notice to Owner requirements.
The potential ambiguity of the statute has required Florida courts to settle multiple disputes as to the preliminary notice’s exact requirements. On March 27, 2013, the District court of Appeal of Florida, Fourth District issued an opinion in Marble Unlimited, Inc. v. Weston Real Estate Investment Corporation providing at least some clarification of the notice to owner requirements under Florida law.
The basic facts of the case are as follows: Beginning in 2003, the plaintiff, Marble Unlimited (“Marble”), entered into several contracts with the defendant, Weston Real Estate Investment Corporation, to complete renovations of several buildings in a condominium complex. In 2006, the same parties entered into two more contracts for renovations to additional buildings in the complex. At some point prior to 2008, the ownership of the property was transferred from Weston Investment, to Weston Development. In 2008, Marble filed mechanics liens, and initiated a foreclosure suit naming both Weston Investment and Weston Development, the latter being the owner of the property at the time of suit. The trial court dismissed the lien claims because Marble had not provided a preliminary notice to owner. Since the subsequent transfer of the property from one owner to an associated corporation did not trigger a new duty to provide a another notice to owner, The same is probably true for a merger in your situation.
Marble appealed this decision. On appeal, the court agreed with Marble that the trial court’s strict interpretation was incorrect, and reversed the lower court’s dismissal of Marble’s foreclosure lawsuit against Weston Development.
The appeals court noted that, pursuant to Florida law, lien claimants with a direct contractual relationship (in privity) with the property owner is not required to send a preliminary notice to owner. The appeals court noted that, after Weston Investment contracted as the owner of the property, it’s transfer of the property to an associated corporation could not invalidate the NTO. It is quite likely that a subsequent change in the name of the entity sending the NTO, would not invalidate the NTO. Best regards