What Is a Notice to Proceed in Construction? When the Clock Starts
A notice to proceed is a written notice from the owner telling the contractor to start work on a specific date. On contracts that use it as the commencement date, it starts the contract time: the days the contractor has to reach substantial completion, and the clock any late-finish damages are measured against. Owners usually send it after the contract is signed, once permits, insurance and financing are in place, so the clock does not start before the job can.
| Before you send it, have | Why it matters |
|---|---|
| A signed contract | The notice starts the work; the contract sets the terms |
| The building permit, or a plan for it | Work that needs a permit cannot start without one |
| Contractor insurance certificates and any bonds | Owners commonly require them before site access |
| Financing or lender approval | A lender may need to approve, or record its lien, first |
| Access to the space | The clock should not run on a site the crew cannot enter |
The usual prerequisites, from AIA and Procore guidance. Your contract may list others. A contractor's plain-language guide, not legal advice.
Signing a lease and need a start date you can count on? We map the permit, materials and crew to your notice date. Licensed in Oregon (CCB #198582) and registered in Washington (L&I MODERNI888R7). Call (360) 326-2747.
What a notice to proceed does
The standard AIA owner-contractor agreement lets the parties pick when the work officially starts: the date the agreement is signed, a date set in a notice to proceed, or another date or method they write down. It then says the contract time is measured from that start date, and the general conditions define the contract time as the period allowed to reach substantial completion. So on contracts that use one, the notice to proceed is the first domino: the start date, the completion date, and any liquidated damages for finishing late all hang off it.
It also tells the contractor to mobilize: book crews, order materials, schedule subcontractors. Any hiring party can issue one, so a general contractor can send the same kind of notice to a subcontractor.
Why owners do not just start on signing day
Signing day is often not a day the work can actually start. The permit may still be in review, the lender may need to approve, the contractor's insurance certificates and bonds may not be in yet, or the current tenant may still be in the space. If the contract time starts on signing day anyway, the contractor loses days it cannot use, and the completion date stops meaning much.
A notice to proceed lets the owner sign early, lock the price, and start the clock once the job can really begin. AIA guidance suggests the contract also say how long the owner has to issue the notice, and what happens to the time and price if it is late, so neither side is left waiting indefinitely.
What goes in the letter
- The project and contract it applies to.
- The commencement date: the day the clock starts.
- Authorization to begin work.
- Any conditions the contractor must meet before mobilizing.
- The resulting substantial completion date, so both sides read the same deadline.
Limited notice to proceed
A limited notice to proceed authorizes only specified early work, such as ordering long-lead equipment, preconstruction or site preparation, before full work is released. It is common when funding or permits are still being finalized and waiting would push the opening date. For a build-out with a storefront system or rooftop unit on a long lead time, releasing the order early can matter more than any day on site.
How it fits a tenant build-out
On a lease, the rent start date or opening date is usually what drives the schedule. Work backward: the opening date, minus the build time, minus the permit, gives the latest notice date that still works. Our commercial construction timeline breaks those pieces down, and who pulls the permit covers the step that most often holds up the notice. Our Orenco Family Medicine clinic in Hillsboro, 5,618 square feet in an office tower, is the kind of job where that backward math starts at the lease, not the first day of framing. The clock runs until substantial completion. More terms are in our commercial construction glossary.
Frequently asked questions
What is a notice to proceed?
A written notice from the owner telling the contractor to start work on a set date. When the contract uses it as the commencement date, the contract time, and every deadline measured from it, starts that day.
Is a notice to proceed the same as signing the contract?
No. The contract sets the price and terms; the notice to proceed sets the start. They can be the same day, but owners often sign first and send the notice once permits, insurance and financing are in place.
What is a limited notice to proceed?
A notice that lets the contractor start only specified early work, such as ordering long-lead materials or preconstruction tasks, before full work is authorized. It is common when funding or permits are still being finalized.
Can a contractor start work without a notice to proceed?
It is risky. If the contract says the work starts with a notice and none has been issued, work done or money spent before it may not be covered. Contractors are generally advised to wait for it in writing.
Who issues a notice to proceed?
The party doing the hiring. Usually the owner sends it to the general contractor, and a general contractor can send one to a subcontractor the same way.
The bottom line
A notice to proceed is the owner's go signal and, on most contracts that use it, the start of the contract time. Send it when the permit, insurance, financing and access are ready, put a deadline for it in the contract, and use a limited notice to release long-lead orders early.
Modern Northwest has started and finished commercial build-outs from Hillsboro to Vancouver since 2005. Tell us your target start date.
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Planning a start date?
Tell us your lease and opening dates. We will work out when the notice to proceed has to go out.
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