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What is a Notice of Assignment (NOA) and why does Constrafor file it (for New York projects)?

A Notice of Assignment (NOA) is a legal notice under Section 9-406 of the Uniform Commercial Code. For New York projects the notice must be filed with a county clerk (private construction projects) or provided to public agencies (public improvement projects). In the context of construction financing a Notice of Assignment notifies all relevant parties that a Contractor has assigned their rights to receive payment for specific work or invoices to a third party, such as Constrafor.

Why Does Constrafor Require a Notice of Assignment for Constrafor's Early Pay Program?

Constrafor requires an NOA when contractors participate in the Early Pay Program (EPP) for several key reasons:

  • Legal Compliance & Risk Mitigation: Under the UCC, a NOA directs payment to Constrafor. In New York, the NOA is filed to comply strictly with New York Lien Law requirements (NY Lien Law §15, 16) regarding assignments and trust funds.
  • Direct Payment: To legally ensure that payments for the invoices purchased by Constrafor are directed to Constrafor, not the contractor.
  • Transparency & Protection: To document the transfer of financial obligations clearly, protecting Constrafor, the Subcontractor, the General Contractor, and the Owner by ensuring a legally compliant transaction process.

Why is a Notice of Assignment Required in New York?

In New York, the NOA plays a crucial role in compliance with state law. 

  • Compliance with NY Lien Law (Private Projects): NY Lien Law §15 requires that Notices of Assignment on private construction projects be filed with the County clerk.
  • Compliance with NY Lien Law (Public Works Projects): NY Lien Law §16 requires that Notices of Assignment be provided to public entities for public works construction projects.

Why is it Filed in the Mechanics Lien Section?

Here is where it can get a bit confusing: 

Although a NOA is not a mechanics lien, the law (specifically New York Lien Law, Section 15), requires that the NOA be filed in the same section of county records where mechanics liens are kept. So if you see the NOA labeled or indexed with mechanics liens or building loan assignments, please do not worry, that’s just how the county handles it. It doesn’t mean a lien has been filed against the project or property. 

Below we provide examples illustrating how the NOA filings might appear in different counties: 

Kings County - Mechanics Lien

Queens Screenshot - shows type as mechanics lien


Key Takeaways

  • Definition: A Notice of Assignment is a legal document that assigns payment rights from a contractor to a third party, such as Constrafor.
  • Legal Compliance: In New York, the NOA must be filed (private projects) or logged with the public entity (public projects) to comply with New York Law.
  • Filing Variation: County Clerks may index NOAs differently. 
  • Constrafor’s Requirement: NOAs are required for contractors using the Early Pay Program to ensure proper payment handling and legal compliance.
  • Benefits: Filing an NOA ensures transparency, reduces legal risks, and protects all parties in construction financing.

Disclaimer: This information is for informational purposes only and does not constitute legal advice. Consult with legal counsel for specific interpretations or advice regarding New York Lien Law or county filing procedures.