Subcontractors Must Not Forget to Serve a Notice of Furnishing

Kegler Brown Construction Newsletter

Subcontractors on commercial projects (and residential work not involving consumers like a "spec" or "tract" home) must be sure to serve a Notice of Furnishing upon the owner on projects where there is a recorded Notice of Commencement.

In addition to the owner, lower-tier subcontractors and suppliers (having no contract with the general contractor) must also serve a copy of the Notice of Furnishing upon the general contractor on private work. In contrast, subcontractors on public projects need not serve a Notice of Furnishing, but lower-tier subcontractors and suppliers must serve a Notice of Furnishing upon the prime contractor (but not the owner).

A subcontractor with a duty to serve a Notice of Furnishing is at risk of losing his lien rights if he fails to serve the notice through a method that produces a written receipt. The notice should be served within 21 days of the subcontractor's or supplier's first date of work on each project in order to fully preserve all lien rights.

Effective September 30, 1998, the failure to serve a Notice of Furnishing will not only result in the loss of lien rights, but also result in the loss of bond rights on public projects in Ohio. Therefore, it is more important than ever that subcontractors and suppliers institute a procedure where Notices of Furnishing are properly served in order to protect both lien and bond rights on that particular project.