Mechanic's Liens and the Notice of Cessation
The general rule is that mechanic's liens can be recorded up until 90 days after the completion of the project. This cut-off date applies to any lien claimant who worked on the project regardless of when the claimant completed work. A properly recorded notice of completion, however, will shorten the time for recording the lien to 30 days after the date of recording the notice of completion for subcontractors and suppliers and 60 days for the general contractor.
Sometimes a project will not be completed. A lien claimant may be watching for completion and filing of the notice of completion to know when the time is running out to record a lien. A claimant can be lulled into a sense of security believing that there is plenty of time to record the lien if the project hasn't been completed. Be aware of this situation. The lien period can run out even if a project is not completed if there has been a cessation of labor on the project.
After a work of improvement has commenced, a cessation of labor on the project for a continuous period of 60 days is deemed equivalent to completion. Recall that a lien claimant has 90 days after completion to record a mechanic's lien if no notice of completion has been recorded. This provides 150 days from the start of the cessation of labor within which to record a lien.
A notice of cessation can be recorded where labor on a project has ceased for a continuous period of 30 days. The effect of the notice of cessation is the same as the notice of completion in that it shortens the time within which lien claimants may record liens. The time for recording liens will be shortened from 90 days to 30 days after recording the notice of cessation for subcontractors and suppliers and 60 days for the general contractor.
Subcontractors must be particularly aware of the date of completion of a project to protect their mechanic's lien rights. There are cut-off dates for recording mechanic's liens as well as for filing lawsuits to foreclose mechanic's liens that are tied to the date of completion. Failure to take action within the prescribed time limits can result in complete loss of the valuable mechanic's lien right.
The law sets forth the information that must be included in a notice of completion. Failure to include the required information can invalidate the notice. In addition, strict time limits are set for the recording of the notice of cessation. A notice of cessation must be recorded after there has been a continuous period of cessation of labor on the project of 30 days.
As with the notice of completion, a failure to comply with the timing requirements can result in an invalid notice.
As with the notice of completion, any lien claimant who finds that a notice of cessation has been recorded and that the 30 or 60 day time period has passed should immediately seek legal counsel to determine if, in fact, it is too late to record a lien. There could be uncertainty as to the date when cessation of labor actually commenced and the notice of cessation could have been recorded less than 30 days after the actual date of cessation. All of these factors could affect the validity of the notice of cessation and provide additional time for recording of your lien.
Sometimes a project will not be completed. A lien claimant may be watching for completion and filing of the notice of completion to know when the time is running out to record a lien. A claimant can be lulled into a sense of security believing that there is plenty of time to record the lien if the project hasn't been completed. Be aware of this situation. The lien period can run out even if a project is not completed if there has been a cessation of labor on the project.
After a work of improvement has commenced, a cessation of labor on the project for a continuous period of 60 days is deemed equivalent to completion. Recall that a lien claimant has 90 days after completion to record a mechanic's lien if no notice of completion has been recorded. This provides 150 days from the start of the cessation of labor within which to record a lien.
A notice of cessation can be recorded where labor on a project has ceased for a continuous period of 30 days. The effect of the notice of cessation is the same as the notice of completion in that it shortens the time within which lien claimants may record liens. The time for recording liens will be shortened from 90 days to 30 days after recording the notice of cessation for subcontractors and suppliers and 60 days for the general contractor.
Subcontractors must be particularly aware of the date of completion of a project to protect their mechanic's lien rights. There are cut-off dates for recording mechanic's liens as well as for filing lawsuits to foreclose mechanic's liens that are tied to the date of completion. Failure to take action within the prescribed time limits can result in complete loss of the valuable mechanic's lien right.
The law sets forth the information that must be included in a notice of completion. Failure to include the required information can invalidate the notice. In addition, strict time limits are set for the recording of the notice of cessation. A notice of cessation must be recorded after there has been a continuous period of cessation of labor on the project of 30 days.
As with the notice of completion, a failure to comply with the timing requirements can result in an invalid notice.
As with the notice of completion, any lien claimant who finds that a notice of cessation has been recorded and that the 30 or 60 day time period has passed should immediately seek legal counsel to determine if, in fact, it is too late to record a lien. There could be uncertainty as to the date when cessation of labor actually commenced and the notice of cessation could have been recorded less than 30 days after the actual date of cessation. All of these factors could affect the validity of the notice of cessation and provide additional time for recording of your lien.
This article is intended to provide general information regarding legal issues. It is not to be relied upon as specific legal advice or in place of the need to seek competent legal advice on specific legal matters. Eugene Bass is an attorney and registered Civil Engineer. He has offices in Redwood City and can be reached at 650-361-1199.
You are here: