Building Code Administrators and Inspectors Florida Principle and Practice Licensure Practice Exam

What action must a contractor take upon receiving a Notice to Owner?

1. Immediately halt all work on the project

2. Verify payment has been made to all preceding lienors

3. Prepare a settlement report before proceeding

4. File a counter-notice

The correct answer is: Verify payment has been made to all preceding lienors

Upon receiving a Notice to Owner, the contractor is required to verify that payment has been made to all preceding lienors. This action is crucial for ensuring that the contractor fulfills their contractual obligations and protects themselves against potential lien claims. The Notice to Owner serves as an official notification that a property is subject to a potential lien, and it encourages contractors to confirm that all prior subcontractors and suppliers have been compensated for their work. By verifying payment to preceding lienors, the contractor helps to maintain the integrity of construction financing and ensures that no disputes arise regarding unpaid obligations. This step is essential not only for maintaining good business practices but also for securing a position in any legal proceedings related to liens should they occur in the future. This process helps ensure that the contractor is not inadvertently placing themselves in a vulnerable position regarding the obligations of payment throughout the chain of construction.