Higgs, Fletcher & Mack LLP

Property Owners Face New Requirements in Filing Notice of Completion or Notice of Cessation
by Michael F. Boyle and Cyndy Day-Wilson

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O n January 1, 2004, SB 134, the "Notice of Completion" Bill, became law in California. Previously, owners were not required to inform those who provided labor, material, and/or equipment to a private works projects when a Notice of Completion or Notice of Cessation was recorded. This often resulted in the contractor or subcontractor being without legal recourse for payment against the owner when the contractor, unaware that a Notice had been filed, failed to timely record a mechanic's lien.

The new law requires owners to:

Notify the original contractor and any subcontractor who has served a Preliminary 20-day Notice, that a Notice of Completion or Notice of Cessation has been recorded
Serve notice of the recording within 10 days of the recorded Notice of Completion or Notice of Cessation
Serve the notice of recording by either registered or certified mail or by first class mail with a certificate of mailing

This new law applies only to private works and if timely notice is not served then the contractor or subcontractor has an additional 90 days to file a mechanic's lien beyond the date of recording of the Notice of Completion or Notice of Cessation.

Included in the new law is a new definition of "ownership" and a requirement that a new Preliminary Notice form be used.

Property owners may wish to protect themselves against these consequence by (1) requiring their contractor to furnish a signed release by the person or firm giving them this notice before making payment to their contractor, or (2) any other method or device that is appropriate under the circumstances.
Any questions concerning the new requirements should be directed to either Michael F. Boyle, Esq. or Cyndy Day-Wilson, Esq., members of the Construction Law Department at Higgs, Fletcher & Mack LLP.

Higgs, Fletcher & Mack has been serving the needs of San Diego businesses and residents since 1939, and offers a full range of legal services in both transactional and litigation matters. The Firm is committed to integrity, thoroughness, and care in striving to achieve outstanding results for clients.