Notice of Nonresponsibility
What is a Notice of Nonresponsibility
A Notice of Nonresponsibility is written notice that the person signing the notice (or the entity for whom the person is signing) will not be responsible for any claims arising from the improvement. Landlords use this notice to protect their property from mechanic’s liens when their tenants are doing improvements. In order for the notice to be effective, the statutory procedures must be followed exactly.
Because a notice of nonresponsibility must be recorded to be effective, consideration should be given to the benefit of the protection the notice provides against a potential mechanic’s lien versus the possibiliy that the recorded notice might show as an exemption in a future title report (cloud on title). For example, in the case of a long lease with extensive and expensive improvements it may be worth recording the notice against the property, whereas a small tenant improvement job may not be worth the potential cloud on title.
Also, a notice of nonresponsibility will not protect a property owner who “caused” the work to be done. An owner is considered to have “caused” the work to be done, for example, if the tenant’s lease requires the tenant to perform certain improvements or if the landlord is providing a tenant allowance for the work. However, in the case where a lease which authorizes a tenant to do improvements, at tenant’s expense, but does not require the tenant to do any improvements, the owner is unlikely to be found to have “caused” the work and therefore a procedurally effective notice should protect the owner’s interest in that case.
Procedures for Preparing Posting and Recording
The notice should be prepared, posted, and filed after the owner has knowledge that the work has commenced, but no longer than 10 days after such knowledge. A notice posted and recorded too early or too late is ineffective.
The information which must be included in the Notice is provided by statute.1 The statute is specific for each situation, but generally for a landlord posting a notice when a tenant is doing improvements, the landlord must include the following:
(1) The nature of the owner’s title or interest - i.e., fee simple, ground lessee, etc.
(2) The name of the tenant doing the work.
(3) A statement that the person giving the notice is not responsible for claims arising from the work of improvement.
(4) The notice shall be signed and verified by the owner (or the owner’s agent).
The landlord should include the following, to the extent known:
(1) The name and address of the owner/tenant who contracted for the work.
(2) The name and address of the direct contractor.
(3) The name and address of the construction lender, if any.
(4) A description of the site sufficient for identification, including the street address of the site, if any.
(5) The name, address, and relationship to the parties of the person giving the notice.
Post and Record
Finally, to be effective, the Notice must be posted and recorded within 10 days of the landlord (or property manager’s) knowledge of the commencement of the improvement work, not just within 10 days of the contemplated work.
Notice must be posted in a conspicuous place on the property and the location of the posting should be stated in the verification.
The notice must be recorded in the County Recorder’s office after posting and still within 10 days after the owner has notice of the work of improvement.
While the above information is intended to provide a general overview of the notice of nonresponsibliy in California, it is not legal advice. If you have questions regarding when or how to prepare and post a notice of nonrepsonsiblity, please contact an attorney to assist you regarding your specific issue. If you like, you may reach me at (619) 325-1440 or email@example.com.