{"id":896333,"date":"2019-08-21T14:16:45","date_gmt":"2019-08-21T20:16:45","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=896333"},"modified":"2019-08-21T14:16:55","modified_gmt":"2019-08-21T20:16:55","slug":"notice-of-completion-determines-mechanics-lien-deadline","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/notice-of-completion-determines-mechanics-lien-deadline\/","title":{"rendered":"Notice of Completion Determines Mechanics Lien Deadline"},"content":{"rendered":"\n<p>William L. Porter | <a href=\"https:\/\/www.porterlaw.com\/notice-of-completion-determines-mechanics-lien-deadline\/\">Porter Law Group<\/a> <\/p>\n\n\n\n<p>The California Mechanics Lien is one of the most valuable collection devices available to contractors, subcontractors and suppliers who are unpaid for work performed and materials supplied in relation to a California Private Works project. The <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/notice-of-non-responsibility-and-california-mechanics-lien\/\">mechanics lien<\/a> allows the claimant to sell the property where the work was performed in order to obtain payment. The process starts with the recording of a mechanics lien in the office of the County Recorder where the property in question is located. As noted below, certain deadlines must be met.<\/p>\n\n\n\n<h6 class=\"wp-block-heading\">Know Your Mechanics Lien Filing Deadlines Generally<\/h6>\n\n\n\n<p>Working within deadlines is absolutely crucial to preserving mechanics lien rights under California law. The deadlines differ, depending on whether you are a \u201ddirect\u201d contractor, also known as \u201c<em>original<\/em>\u201d or \u201c<em>prime\u201d\u00a0<\/em>contractor (one who contracts directly with the property owner) or a\u00a0<em>subcontractor<\/em>\u00a0or\u00a0<em>material supplier<\/em>. The primary differences are that, the direct contractor is only required to serve the \u201cPreliminary Notice\u201d on the Construction Lender (Civil Code section 8200-8216), whereas the subcontractor and material supplier must serve not only the Construction Lender, but also the Owner and Direct Contractor (see Civil Code section 8200(e)). Another difference is that a direct contractor has a longer period of time in which to record a mechanics lien after a valid \u201c<em><a href=\"https:\/\/www.myconstructionexpert.com\/blog\/an-owners-guide-to-notices-of-completion-cessation-and-non-responsibility\/\">notice of completion<\/a><\/em>\u201d or a \u201c<em>notice of cessation<\/em>\u201d has been recorded (Civil Code sections 8180-8190), (60 days for original contractors as compared to 30 days for subcontractors and suppliers \u2013 See Civil Code sections 8412 and 8414). A further general description of the rules is as follows:<\/p>\n\n\n\n<h6 class=\"wp-block-heading\">Direct (Prime or Original) Contractor Mechanics Lien Deadlines<\/h6>\n\n\n\n<p>If a Valid Notice of Completion or a Notice of Cessation Has Been Recorded<br>If a valid \u201cNotice of Completion\u201d or \u201cNotice of Cessation\u201d has been recorded with the County Recorder in the County where the work of improvement is physically located the direct (prime) contractor has&nbsp;<em>60 days<\/em>after the date on which such notice was recorded before which the direct (prime) contractor must record a mechanics lien. (<em>See<\/em>&nbsp;Civil Code sections 8050, 8188, 8182, 8184, 9204, 9208).<\/p>\n\n\n\n<p>Note that a \u201cNotice of Completion\u201d is generally valid only if filed within 15 days after actual completion of the work of improvement. A \u201cNotice of Cessation\u201d may generally be filed only after work on the work of improvement has stopped for a continuous period of 30 days, even though the project is not completed. (<em>See<\/em>&nbsp;Civil Code sections 8050, 8188, 9202, 8182, 8184, 9204, 9208)<br>If No Notice of Completion or Notice of Cessation Has Been Recorded<br>If no Notice of Completion or Notice of Cessation has been recorded as to the work of improvement, then contractors, subcontractors and suppliers alike have&nbsp;<strong>90 days<\/strong>&nbsp;after work on the project is completed before which they must record a mechanics lien. This 90 day period may be extended in cases where, although the project is not fully completed, the work on the project has stopped for a continuous period of 60 days and neither the owner nor his agent has accepted the project or moved into the premises. (<em>See<\/em>Civil Code sections 8180, 9200, 8412, 8414, 8028, 8018 and 8046.)<\/p>\n\n\n\n<h6 class=\"wp-block-heading\">Subcontractor (and Supplier) Mechanics Lien Deadlines<\/h6>\n\n\n\n<p>As with the direct (prime) contractor, it is essential that subcontractors and material suppliers are aware of important deadlines. Because subcontractors and suppliers must always serve a \u201c<em>Preliminary Notice<\/em>\u201d under Civil Code section 8200 et seq., subcontractors and suppliers have an even greater need to understand these important deadlines. The first of the deadlines of which the subcontractor and material suppliers must be aware are the deadlines in connection with the all important \u201cPreliminary Notice.\u201d<br>The Preliminary Notice Requirement for Subcontractors and Material Suppliers (Private Works)<br>Subject to a few exceptions, the \u201cPreliminary Notice\u201d is a prerequisite to pursuit of mechanics lien claims, stop payment notice claims and bond claims by subcontractors and suppliers. In private works, one primary purpose of the Preliminary Notice is to advise the owner and lender that a potential claimant has contributed work or materials to a project and may file a mechanics lien or other legal claim at a later time. Serving the Preliminary Notice on the owner and lender provides the requisite notice. Subcontractors and material suppliers should always serve a Preliminary Notice within 20 days after first providing labor or materials to a project in order to fully protect their rights to a mechanics lien, stop payment notice or bond claim. (<em>See&nbsp;<\/em>Civil Code section 8200 et seq., 8400 et seq. and 8600 et seq.)<\/p>\n\n\n\n<p><strong>Note:<\/strong>&nbsp;While Civil Code section 8204 specifies the&nbsp;<em>last possible date<\/em>&nbsp;on which to properly serve the Preliminary Notice, it does not specify a date which would be&nbsp;<em>too early<\/em>&nbsp;to serve the Preliminary Notice. The subcontractor or material supplier should establish mechanisms so that at some point between execution of a contract and the commencement of work or the supplying of materials by the subcontractor or material supplier begins, the Preliminary Notice is properly served.<br>Procedure and Deadline for Service of a Preliminary Notice<br>Within&nbsp;<strong>20 days<\/strong>&nbsp;after first furnishing labor, materials or equipment to a jobsite, the subcontractor or material supplier must fill out and send a \u201cCalifornia Preliminary Notice\u201d to the original contractor, owner and the lender, if any. Direct contractors need only serve the Construction Lender, if any, within the same time period. The Notice should be sent by either registered mail, certified mail, return receipt requested, or by express mail or overnight delivery by an express service carrier. The notice can also be hand-delivered. However, certified mail, registered mail or overnight delivery are strongly recommended, because it provides a form of objective documentary proof of delivery. Before sending out the Notice, always make a copy of the fully completed Notice for your records. Staple your \u201cReceipt for Certified Mail\u201d or other proof of delivery to your copy and keep it in a separate folder for the particular job. Later, after the post office returns the green \u201cReturn Receipt\u201d to your office, staple that return receipt to your copy and return it to your job file. It is important to safeguard these documents since they may be needed to prove your case in court at a later time (<em>See<\/em>&nbsp;Civil Code sections 8200-8216).<\/p>\n\n\n\n<p><strong>Note:<\/strong>&nbsp;In projects where the contract is for over $400, failure of the subcontractor to give the Preliminary Notice may also subject the subcontractor to disciplinary action with the Contractors\u2019 State License Board. (<em>See<\/em>&nbsp;Civil Code sections 8216, 8410;&nbsp;<em>see also<\/em>&nbsp;Civil Code sections 8200-8216.).<\/p>\n\n\n\n<h6 class=\"wp-block-heading\">Deadline for Subcontractor or Material Supplier to Record a Mechanics Lien<\/h6>\n\n\n\n<p>If a Valid Notice of Completion or a Valid Notice of Cessation Has Been Recorded<br>If a valid \u201cNotice of Completion\u201d or \u201cNotice of Cessation\u201d has been recorded on the project, subject to the exception noted below in regard to the 2004 revisions to Civil Code section 3097 and 3259.5 (now 8200 et seq. and 8190), the claimant may have as few as<strong>&nbsp;30 DAYS<\/strong>&nbsp;after the date on which such notice was recorded before which the claimant must record a mechanics lien (<em>See<\/em>&nbsp;Civil Code sections 8188, 9202, 8182, 8184, 9204, 9208, 8050, 8414, 8186.)<\/p>\n\n\n\n<p><strong>Note:<\/strong>&nbsp;A \u201cNotice of Completion\u201d is generally valid only if filed within 15 days after actual completion. A \u201cNotice of Cessation\u201d may generally be filed only after work on the work of improvement has stopped for a continuous period of 30 days (<em>See<\/em>&nbsp;Civil Code sections 8188, 9202, 8182, 8184, 924, 9208, 8050, 8414, 8186.)<\/p>\n\n\n\n<p><strong>Deadline Extended if Claimants Not Notified of Notice of Completion or Notice of Cessation<\/strong>: An exception to the 30 day rule for recording a mechanics lien by a subcontractor or supplier after a valid notice of completion or notice of cessation can be found in Civil Code sections 8190, 8412-8414. These code sections require private project owners to notify subcontractors and suppliers within 10 days after recording a Notice of Completion or Notice of Cessation that the document has been recorded. In order to receive such notice, the subcontractor or supplier must properly use and serve the Preliminary 20 Day Notice. If this properly occurs and the private project owner provides the required notice to the subcontractor or supplier, then the subcontractor or supplier will have only&nbsp;<strong>30 days<\/strong>&nbsp;to record a mechanics lien. If an owner under such circumstances however fails to properly notify a subcontractor or supplier within 10 days after recording a Notice of Completion or Notice of Cessation, then the Subcontractor or supplier will have&nbsp;<strong>90 days<\/strong>&nbsp;to record a mechanics lien. The details of the law can be found in California Civil Code sections 8190, 8412-8414.<\/p>\n\n\n\n<p>In order to benefit from this law, the subcontractor or supplier must include the following&nbsp;<em>language<\/em>, in boldface type, on the Preliminary Notice under the section often found near the top of the form entitled:<\/p>\n\n\n\n<p><strong>NOTICE TO PROPERTY OWNER:<\/strong><\/p>\n\n\n\n<p><strong>EVEN THOUGH YOU HAVE PAID YOUR CONTRACTOR IN FULL, if the person or firm that has given you this notice is not paid in full for labor, service, equipment, or material provided or to be provided to your construction project, a lien may be placed on your property. Foreclosure of the lien may lead to loss of all or part of your property. You may wish to protect yourself against this by (1 requiring your contractor to provide a signed release by the person or firm that has given you this notice before making payment to your contractor, or (2) any other method that is appropriate under the circumstances. This notice is required by law to be served by the undersigned as a statement of your legal rights. This notice is not intended to reflect upon the financial condition of the contractor or the person employed by you on the construction project. If you record a notice of cessation or completion of your construction project, you must within 10 days after recording, send a copy of the notice of completion to your contractor and the person or firm that has given you this notice. The notice must be sent by registered or certified mail. Failure to send the notice will extend the deadline to record a claim of lien. You are not required to send the notice if you are a residential homeowner of a dwelling containing four or fewer units.<\/strong><\/p>\n\n\n\n<p>Please note that this law does not apply to public works projects or owner-occupied personal residences of less than 5 units. Moreover, the law does not apply to those subcontractors and suppliers who fail to serve a Preliminary Notice or, of course, when no Notice of Completion or Notice of Cessation has been recorded.<\/p>\n\n\n\n<p>Please be sure to update your Preliminary Notice forms to properly include the above language. Failure to do so could result in loss of legal rights important for the collection of debt for work performed and materials supplied to private works projects.<\/p>\n\n\n\n<p><strong>Note:<\/strong>&nbsp;Even though a material supplier may have a contract directly with the owner of the property in question, the material supplier still does not thereby fall into the category of a \u201cdirect\u201d , \u201cprime\u201d or \u201coriginal\u201d contractor within the definition of Civil Code section 8018. Therefore, even a material supplier who has a contract directly with the owner must record its mechanics lien within only 30 days after a valid notice of completion has been recorded as is required by Civil Code section 8414. Such a supplier cannot take advantage of the 60 day deadline available to direct contractors even though the supplier, like the direct contractor, has a contract directly with the owner. A supplier is a supplier and does not become an original contractor simply by having a contract with the owner. See&nbsp;Sparks v. Butte County Gravel Mining Co. (1880) 55 Cal. 389,&nbsp;Vaughn Materials v. Security Pacific National Bank&nbsp;(1985) 170 Cal.App.3d 908, 216 Cal.Rptr. 605.<\/p>\n\n\n\n<p>A free and suitable Preliminary Notice \u2013 Private Work form can be found at www.porterlaw.com. There are many manufacturers of such forms. Not all such forms have the same appearance as the referenced form. But all proper forms will contain the same essential information.<br>If No Notice of Completion or Notice of Cessation Has Been Recorded<br>If no Notice of Completion or Notice of Cessation has been recorded then contractors, subcontractors and material suppliers alike have&nbsp;<strong>90 days<\/strong>&nbsp;after work on the project is completed before which they must record a mechanics lien. This 90 day period may be extended in cases where, although the project is not fully completed, the work on the project has stopped for a continuous period of 60 days and neither the owner nor his agent has accepted the project or moved into the premises. If you have missed this 90 day deadline and there is no Notice of Completion or Notice of Cessation on file with the County Recorder in the County where the work was performed, consult with an attorney to see if any factual scenario might give more time than originally thought. (<em>See<\/em>&nbsp;Civil Code sections 8180, 9200, 8412, 8414, 8028, 8018, 8046.)<\/p>\n\n\n\n<h6 class=\"wp-block-heading\">How to Determine the Last Date of Work<\/h6>\n\n\n\n<p>The last day of work on a project is important to determine for several reasons. If the owner records a \u201cNotice of Completion\u201d under Civil Code section 8182, the owner thereby triggering the quicker time frame for direct contractors (60 days) and subcontractors and suppliers (30 days) to record their mechanics liens under sections 8412 and 8414. However, it is first necessary to determine whether the Notice of Completion is even valid. This is because Notices of Completion must be recorded no earlier than actual completion of the work of improvement and no later than 15 days after actual completion of the work of improvement. If the Notice of Completion is not recorded within this 15 day window then the Notice of Completion is generally not valid. (See, Civil Code sections 8182 and 9204.)<\/p>\n\n\n\n<p>Where the Notice of Completion is not valid or where no Notice of Completion has been recorded, Civil Code section 8412 and 8414 tell us that contractors, subcontractors and material suppliers alike may record their mechanics liens beginning when they have finished supplying their own work or materials to the project up until 90 days after completion of the entire work of improvement.<\/p>\n\n\n\n<p>The last day of work on a project or \u201ccompletion\u201d for private works is defined under Civil Code section 8180. Section 8180 states:<\/p>\n\n\n\n<p>8180. (a) For the purpose of this title, completion of a work of improvement occurs upon the occurrence of any of the following events:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>(1) Actual completion of the work of improvement.<br>(2) Occupation or use by the owner accompanied by cessation of labor.<br>(3) Cessation of labor for a continuous period of 60 days.<br>(4) Recordation of a notice of cessation after cessation of labor for a continuous period of 30 days.<\/p><p>(b) Notwithstanding subdivision (a), if a work of improvement is subject to acceptance by a public entity, completion occurs on acceptance.<\/p><\/blockquote>\n\n\n\n<p>If the work of improvement is subject to acceptance by any public entity, the completion of such work of improvement shall be deemed to be the date of such acceptance; provided, however, that, except as to contracts awarded under the State Contract Act, Chapter 3 (commencing with Section 14250), Part 5, Division 3, Title 2 of the Government&nbsp;<strong>Code<\/strong>, a cessation of labor on any public work for a continuous period of 30 days shall be a completion thereof.\u201d [emphasis added] (see Civil Code section 9200 et seq.)<\/p>\n\n\n\n<p><em>Occupation or Use:<\/em>&nbsp;Generally, the occupation or use of the work of improvement referenced above must be open and entire, and must concur with a cessation from work, but such cessation need not continue for any particular time, if it is accompanied by occupation or use of the work of improvement. See&nbsp;Baird v. Havas&nbsp;(1946) 72 Cal.App.2d 520, 164 P.2d 952 .<\/p>\n\n\n\n<p>Where occupancy co-exists with or is consistent with further performance of the work, actual completion may not have been achieved. There has been only a cessation of labor that must continue for 60 days before the 90 day lien filing period commences. In such case, where no notice of completion or of cessation was filed, the claimant has 150 days (90 days under section 3115 and 3116 (now 8412 and 8416) plus 60 days under Section 3086(c) (now 8180)) from such occupancy in which to file a mechanics lien. See&nbsp;M. Arthur Gensler, Jr. &amp; Associates, Inc. v. Larry Barrett Inc. (1972) 7 Cal.3d 695, 103 Cal.Rptr. 247, 499 P.2d 503.<\/p>\n\n\n\n<p><em>Acceptance:<\/em>&nbsp;It is not necessary that the acceptance (referenced above) be accompanied by cessation of labor, but it must be open and sufficient to give notice by necessary implication. See,&nbsp;Orlandi v. Gray(1899) 125 Cal. 372, 58 P.15;&nbsp;Hammond Lumber Co. v. Barth&nbsp;(1927) 202 Cal. 606, 262 P. 31.<\/p>\n\n\n\n<p>Small subsequent changes to the work, including punch list items to correct defective or damaged work (as opposed to punch lists giving notice to complete&nbsp;<em>uncompleted<\/em>&nbsp;contract work) will not extend the time of actual completion or the time for filing a mechanics lien. See&nbsp;Hammond Lumber Co. v. Yeager&nbsp;(1921) 185 Cal. 355, 197 P. 111;&nbsp;Hunley v. Marinkovich&nbsp;(1942) 53 Cal.App 2d. 288, 127 P.2d 600.<\/p>\n\n\n\n<p>Whether or not a project is \u201dsubject to acceptance\u201d depends on whether the improvement was&nbsp;<em>required<\/em>&nbsp;to be accepted by a public entity pursuant to a legislative act despite the fact that the contractor may have otherwise complied with all requirements necessary for approval and acceptance of the project. See,&nbsp;A.J. Raisch Paving Co. v. Mountain View Sav. &amp; Loan Ass\u2019n&nbsp;(1972) 28 Cal.App.3d 832, 105 Cal.Rptr. 96.<\/p>\n\n\n\n<p>It has been held that a subcontractor working on improvements in a shopping mall could not record a valid mechanics lien based on the argument that he did so within 90 days after completion of all the work done at all the individual stores in the mall. This was because each store had a separate contract for improvement, the individual shop owners were not in contractual relationships with each other and each store was thus deemed a separate work of improvement. This is not a situation were a single lien could have been filed on the entire mall for multiple improvements made at the request of a single owner. See, Civil Code section 3130 (now 8446),&nbsp;Insul-Acoustics, Inc. v. Lee&nbsp;(1982) 136 Cal.App.3d 552, 186 Cal.Rptr. 324.<\/p>\n\n\n\n<p><em>Cessation of Labor for 60 Days or 30 Days if Accompanied by a Notice of Cessation:<\/em>&nbsp;The cessation of labor necessary to meet this standard must impart notice to a careful person. The cessation cannot be a \u201dmere clandestine stopping of actual work.\u201d See,&nbsp;Marble Lime Co. v. Lordsburg Hotel Co.&nbsp;(1892) 96 Cal. 332, 31 P. 164.<\/p>\n\n\n\n<p><em>Note in Regard to Condominiums:&nbsp;<\/em>Civil Code section 8448 generally provides that if a work of improvement consists in the construction of two or more separate residential units, each unit shall be considered a separate \u201dwork of improvement,\u201d and the time for filing claims of lien against each such residential unit shall commence to run upon the completion of each residential unit. However, this has been held inapplicable to condominiums. See, E. D. McGillicuddy Constr. Co. v. Knoll Recreation Ass\u2019n, Inc.&nbsp;(1973) 31 Cal.App.3d 891, 107 Cal.Rptr. 899.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>William L. Porter | Porter Law Group The California Mechanics Lien is one of the most valuable collection devices available to contractors, subcontractors and suppliers who are unpaid for work performed and materials supplied in relation to a California Private Works project. The mechanics lien allows the claimant to sell the property where the work&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/notice-of-completion-determines-mechanics-lien-deadline\/\">Continue reading <span class=\"screen-reader-text\">Notice of Completion Determines Mechanics Lien Deadline<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10772],"tags":[9895,88,184,10912],"class_list":["post-896333","post","type-post","status-publish","format-standard","hentry","category-mechanics-lien-law","tag-advise-consult","tag-california","tag-mechanics-lien-law","tag-notice-of-completion","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Notice of Completion Determines Mechanics Lien Deadline - Advise &amp; 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