If you work as a subcontractor or other lower-tiered contractor in California or Arizona, you may have heard about a Notice of Completion or a Notice of Cessation being used to limit lien deadlines. It’s a scary thought that a higher-tiered project participant can file a document without your knowledge that can cut your deadline to file significantly (in some cases, by up to two-thirds, or from 90 to just 30 days). Please continue reading to learn just about everything you may want to know about Notices of Completion in Arizona and Notices of Completion in California — and how these construction documents can affect your lien deadlines when filed.
Read more: What Is a Notice of Completion?
Both Arizona and California have somewhat similar Notice of Completion requirements. In California, the mechanics lien deadline for lower-tiered parties from the subcontractor and below (see graphic, right) is typically 90 days from completion of the work. If a Notice of Completion or Cessation is filed, the deadline to file can be reduced to just 30 days from this document’s filing!
Similarly, in Arizona, the deadline to file a lien for all parties is within 120 days after completion of the project. If a Notice of Completion is filed, that deadline drops to 60 days from the filing of the Notice of Completion.
A Simple Solution to Protect Your Lien Rights
There’s a simple, 2-step solution for lower-tiered parties to make sure they’re protected if and when a Notice of Completion is filed (thereby causing their lien deadlines to be shortened):
1) Send Preliminary Notices on every project
2) Make sure the preliminary notice is sent to all required recipients, including the property owner
That’s because in both California and Arizona, before a property owner is allowed to shorten the deadline to file a lien on a project, they must first send a Notice of Completion to all parties who have supplied them with a preliminary notice, alerting them that the Notice of Completion has been filed and that the deadline to file the mechanics lien has been reduced. Therefore, sending a preliminary notice to the project owner ensures that they can’t shorten your lien deadlines without warning you first.
In Arizona, according to § 33-993, the owner or its agent must typically mail a copy of the Notice of Completion (with a written statement of the date of recording information) within 15 days of recording to all parties who the owner received a preliminary notice from. Failure to provide a copy of the Notice of Completion and written statement typically means any parties who have sent a preliminary notice will continue to retain the typical deadline of 120 days from completion.
In California, according to § 8190, owners who record a Notice of Completion or Cessation will generally need to give a copy of the notice to the General Contractor and any claimant that has given the owner a preliminary notice. The deadline for the owner to provide this notices is within 10 days. Failure to provide a copy of the notice to a party who has supplied the owner with a preliminary notice will typically result in the Notice of Completion being ineffective in shortening the lien deadline period.
Bottom Line: Protect Yourself With Preliminary Notices
The bottom line is clear. In both states, the owner or party filing the Notice Completion is responsible to provide a copy to every party from whom they received a timely preliminary notice. Therefore, as long as a lower-tiered party files timely preliminary notices, an upper-tiered party cannot shorten their lien deadlines without their knowledge.
However, construction companies sending preliminary notices in both states must still proceed with caution. While both states require lower tiered parties to send a preliminary notice, this requirement is generally fulfilled as soon as the notice is mailed, using the normal, everyday level of USPS delivery .
This can make the Notice of Completion process tricky if the preliminary notice “gets lost in the mail” and is not in fact received by the property owner. If the recipients don’t your preliminary notice, they in turn may not know that they have to send the Notice of Completion back to you. That’s why monitoring your mailings (or having a software such as Levelset to track your unclaimed or undeliverable mailings for you) is an ideal process in both Arizona and California. Retaining copies of your affidavit of mailing can also be a vital step in ensuring you can prove your preliminary notice was sent out.