Key Takeaways

  • A notice of contract formally records the agreement between a contractor and a property owner, protecting lien rights in states like Louisiana and Massachusetts.
  • Filing this notice is often mandatory before work begins on large construction projects.
  • Failing to file a notice of contract on time can lead to the loss of lien rights.
  • Different jurisdictions (e.g., Louisiana, Massachusetts) have specific statutory requirements, such as filing locations, deadlines, and document contents.
  • Notices can be challenged for inaccuracy or fraud; courts may invalidate improper notices.
  • A properly filed notice sets key legal timelines, especially for subcontractor lien claims.

A notice of contract is defined as the knowledge of information of specific facts or of a certain state of affairs and the formal papers that provide this information. Notice is given directly to the involved party. There is both implied notice and express notice, which are different. Implied notice is inferred or deduced from the situation instead of from explicit or direct words. Express notice is when someone actually reads or hears the notice.

Legal Definition of Notice

There is also constructive notice, which is where the court decides a person should have known. This can be based off a legal relationship, such as partnerships that are law governing, where every party has knowledge of all parts of the business. If one partner participates in transactions that are dishonest, it's presumed the other partners know, whether or not they had actual knowledge of the transaction.

In some cases regarding real property purchase, a person will be charged with an inquiry notice. This is when a person wants to purchase land and has the obligation to verify the property's title to see if the land is subject to any encumbrances. This can include the following:

  • Easements
  • Liens
  • Right of ways
  • Mortgages
  • Claims
  • Leases
  • Unpaid taxes

While the inquiry notice looks closely at recorded documents, the notice recording statutes say that it's invalid to have any conveyance of a property that's unrecorded. A notice is crucial to legal proceedings integrity, where due process needs legal action that can't be taken until the notice and a chance to be heard are observed. The person giving the notice initiates the legal proceedings to the person who's affected. If someone gets accused of a crime, they need to be notified of their charges.

Many municipalities and states have a notice of claims provisions in their ordinances and statutes that say a notice of claim needs to be filed before a lawsuit begins and within a reasonable timeframe. This is often three to six months after their injury occurs. The notice needs to include what the date of the injury was, when it happened, and any other important facts to show that the plaintiff has a reasonable cause of action.

It's also essential to give notice when ending legal relationships, such as a notice to quit given to the landlord by the tenant that states the tenant has the intention to give up their possession of the property by a certain day. This can be the opposite as well, where the landlord gives the tenant a notice saying they will regain their possession of the property by a specific day. Notice can often refer to facts that are commonly known that the administrative agency or court takes into evidence during the hearing or trial.

What Is a Notice of Contract?

When a contractor and homeowner complete a contract, the notice of contract needs to be filed with the mortgage office in order for the parties to preserve their privileges and claims later. The information that's mandatory is in Louisiana Revised Statute 9:4811 and includes the price, signatures of the contractor and the owner, when the payment will be received, a description of what work will be done, description of the property where the work will be done, and the mailing addresses of the parties.

Filing Requirements for a Notice of Contract

The notice of contract must be filed in the mortgage records of the parish (in Louisiana) or county (in Massachusetts and others) where the work is to be performed. The notice must be filed before the work begins in most jurisdictions to be effective.

Key filing requirements typically include:

  • The full legal names and mailing addresses of the contractor and property owner.
  • A legal property description sufficient to identify the property.
  • A general description of the work to be performed.
  • The contract price and payment terms.
  • The signatures of both parties.

In Massachusetts, for example, under Chapter 254 of the General Laws, a general contractor must file the notice before recording a lien to secure their payment rights​​.

Why File a Notice of Contract?

It's important to file the notice of contract since it helps to figure out when the tolling period starts for filing liens. This can be complicated, as numerous parties are affected and involved in this filing, including the contractor. If the contractor fails to file the notice for projects that are over $25,000, they can lose their right to file a lien later. That means if the contractor wants to retain their rights, the notice of contract needs to be filed before they begin their work according to the Louisiana Revised Statute 9:4820.

When the notice is filed correctly, the contractor will have up to sixty days to file their lien. When it comes to a subcontractor and a correct notice of contract, the countdown to file the lien starts after the notice of termination is filed, not based on when the project is completed.

Consequences of Failing to File

Failing to timely file a notice of contract can have significant legal consequences:

  • Loss of lien rights: Contractors and subcontractors may forfeit their ability to file a mechanic’s lien to recover unpaid amounts.
  • Limited remedies: Without the lien right, parties are often left only with breach of contract claims, which can be harder to enforce.
  • Shortened filing windows: Subcontractors may have a reduced timeline to file a notice of termination or notice of subcontract if the original notice wasn’t filed.

For example, in Louisiana, failure to file before starting work on a project over $25,000 can invalidate your lien claim rights entirely​.

How Notices of Contract Protect Legal Rights

A properly filed notice of contract creates public notice of the contractor’s involvement and claim to payment, which:

  • Establishes a priority date for liens.
  • Signals to lenders and subsequent buyers that the contractor or subcontractors may have a legal interest in the property.
  • Serves as a legal defense in disputes about payment or work scope.

It also helps general contractors comply with laws that require “preliminary notices” before lien rights attach, streamlining legal enforcement options in case of dispute or non-payment​​.

Can a Notice of Contract Be Challenged?

Yes, notices of contract can be challenged in court. Common reasons include:

  • Fraud or misrepresentation in the filing.
  • Incorrect or vague property descriptions.
  • Omissions such as lack of signature or contract price.
  • Failure to meet statutory deadlines.

If the notice is found defective, the filer could lose the ability to enforce a lien or claim priority over subsequent creditors. Courts carefully examine these filings, especially in real estate disputes​.

Frequently Asked Questions

  1. What is a notice of contract used for in construction?
    It formally records a construction contract and preserves a contractor’s right to file a lien if they are not paid.
  2. Who needs to file a notice of contract?
    General contractors usually file the notice, but in some states, subcontractors may also file notices of subcontract.
  3. When should a notice of contract be filed?
    Typically, before work begins on the property. Deadlines vary by state law, so timely filing is crucial.
  4. Can I file a notice of contract after work begins?
    In some jurisdictions, late filings may still be allowed, but they may not protect lien rights retroactively.
  5. Where do I file a notice of contract?
    You must file it with the appropriate public records office—often the clerk of court or registry of deeds in the county or parish where the property is located.

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