THE LAW AND CIVIL ENGINEERING – AUGUST 2018 NEWSLETTER
Mechanic’s Liens and the Notice of Cessation
by Eugene Bass
In a prior article the issues of completion of a project and the notice of completion were discussed. It was noted that cut-off times applied for recording a mechanic’s lien and that the cut-off times were tied to the date of completion of the project and to the date that a valid notice of completion was recorded.
The general rule is that a mechanic’s liens can be recorded up until 90 days after the completion of a project of which he lien claimant’s work was a part. This cut-off date applied to any lien claimant who worked on the project regardless of when the claimant completed it’s work. A properly recorded notice of completion, however, will shorten the time for recording the lien to 60 days after the date of recording the notice for those with a direct contract with he owner and 30 days for all other lien claimants.
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 will expire for recording the 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 for a statutory period of time.
After a work of improvement has commenced, a cessation of labor for a continuous period of 60 days is deemed equivalent to completion. Recall that a lien claimant normally 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. The time to file a lien can be shortened, however, by filing a valid notice of cessation.
A notice of cessation can be recorded after labor on a project has ceased for a continuous period of 30 days. The effect of the notice is similat to 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 60 days after recording the notice for claimants who have a direct contract with he owner and 30 days for all others.
All lien claimants must be particularly aware of the date of cessation of work on a project to file their liens in a timely manner. 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 requirements for a valid notice of cessation. Failure to adhere to those requirements can invalidate the notice. In addition, strict time limits are set for the recording of the notice of cessation.
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.