Cessation of work occurs when a contractor stops or postpones work on a project, usually because of a payment dispute with a project owner.
A notice of cessation is a written notice provided by a project owner stating that no work has taken place at a project site for a certain period of time. It may be recorded if there has been a cessation or stop in labor for 30 or more days in a row.
A notice of completion is a written notice by the owner indicating that the project is complete. Completion” may refer to an actual completion of services, or stop in labor for 60 or more consecutive days. It may be recorded on, or up to 15 days after the date of completion.
Both notices are utilized as a means of reducing the time that contractors or subcontractors may record a mechanics lien or serve a stop notice.
California Civil Code Section 3259.5 states that a project owner must provide a contractor with a notice of completion or a notice of cessation within 10 days of its recording. (Residential property owners do not need to serve such notices, however, if the property is only one to four units.) Notices should be served in person, or by registered/certified mail.
A contractor must file a mechanic’s lien within 60 days of the recording of the stoppage of work due to nonpayment or completion. Subcontractors have up to 30 days to file. Failure to adhere to these proper deadlines may void the contractor’s right to a valid claim for a mechanic’s lien.
Failure by a project owner to provide a notice of cessation or a notice of completion within 10 days of recording, however, extends the period of time in which a contractor can file a mechanic’s lien from 60 days to 90 days.
