Understanding Notice of Commencement in Commercial Transactions-Ch3
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Questions and Answers

What is the significance of a payment bond attached to a Notice of Commencement?

  • Ensures the property owner cannot modify the mortgage
  • Exempts the general contractor from placing a lien on the property
  • Allows the general contractor to lean the property
  • Prevents sub-suppliers from placing a lien on the property (correct)

    • What can the general contractor do if their liens are not exempt under the payment bond?

  • Terminate the Notice of Commencement
  • Sue the sub-suppliers
  • Record the payment bond
  • Subordinate their lien rights to the mortgage (correct)

    • How is a situation where a payment bond is not properly attached handled according to the text?

  • By suing the general contractor
  • By modifying the mortgage
  • Through a procedure under 713.24 that can be transferred through the clerk (correct)
  • By terminating the Notice of Commencement

    • What documents need to be filed to terminate a Notice of Commencement?

    <p>Notice of termination, contractor's final affidavit, and owner's construction affidavit</p> Signup and view all the answers

    What is recommended to be done before recording a new Notice of Commencement if construction is going to continue post-closing?

    <p>Stop work for 24 hours, record the deed and mortgage, then record the new NOC</p> Signup and view all the answers

    Why does underwriting need to be involved in managing the sale or mortgage of a property with an existing NOC?

    <p>To manage risks and claim issues associated with the termination process</p> Signup and view all the answers

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