The COVID-19 pandemic has been upending construction projects around the country, suspending them or forcing them to shut down. If you’re working on a project that’s experienced this, be sure to take that into account when securing your mechanics lien rights. There are a handful of states where the cessation of labor can affect your lien filing deadlines.
Cessation of labor & lien filing deadlines
As the country continues to deal with the spread of the coronavirus, securing your right to file a mechanics lien is more important than ever. And one of the most common ways claimants lose their lien rights is by missing their deadline to file. But did you know that there are a handful of states where the deadline to file can be altered by a continued cessation of labor? If the project is suspended for a period of time, be sure to take the cessation of labor into account. Here are the states where a cessation of labor will impact the deadline to file a mechanics lien.
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Arizona
AZ lien filing deadline
The deadline to file an Arizona mechanics lien is governed by A.R.S. §33-993(A). Under this statute, a lien claim must be filed within 180 days from completion of the entire improvement, not from the last date the claimant furnished labor or materials to the project. However, if a Notice of Completion has been recorded, the deadline will then be 60 days from when the notice was recorded.
Cessation of labor deadline
The same statute cited above adds an additional factor to consider when calculating the Arizona lien filing deadline. This states that the term “completion” means the earlier of either:
- 30 days after final inspection and written final acceptance by the governmental body which issued the building permit; or
- Cessation of labor for a period of 60 consecutive days, except when such cessation of labor is due to a strike, shortage of materials, or Act of God.
Therefore, if no work has been performed on a project for 60 days straight, here’s how to calculate the lien filing deadline. Start with the last day you provided any labor or materials to the project before the project was suspended. The deadline to file will be 180 days; 60 days of “cessation of labor” plus the 120-day filing period.
- Note: Cessation of labor will also affect Arizona stop notice deadlines
Exception to the AZ cessation of labor rule
Unlike the other states on this list, “cessation of labor” in Arizona comes with a caveat. The project will be deemed as completed after 60 days of cessation of labor, only if the suspension isn’t caused by a labor strike, a material shortage or an Act of God. Keep in mind that this doesn’t include all force majeure events, only Acts of God such as weather conditions and other natural disasters.
California
Lien filing deadline
California mechanics lien deadlines can vary depending on the role of the lien claimant.
For direct contractors (i.e. those who were hired directly by the owner) are governed under Cal. Civ. Code §8412. These types of claimants must file their lien claims by the earlier of either:
- 90 days after completion of the entire project; or
- 60 days after the owner records a Notice of Completion or Cessation.
As for all other claimants, under Cal. Civ. Code §8413, their mechanics lien must be filed by the earlier of either:
- 90 days after completion of the entire project; or
- 30 days after the owner records a Notice of Completion or Cessation.
Cessation of labor filing deadline
Although a Notice of Cessation is factored into the CA lien filing deadline, that’s not the end of the story. Under Cal. Civ. Code. §8180, completion of a work of improvement is defined as the occurrence of any of the following events:
- Actual completion of the work;
- Occupation or use by the owner, accompanied by the cessation of labor;
- Cessation of labor for a continuous period of 60 days; or
- Recordation of a Notice of Cessation after cessation of labor for a continuous period of 30 days.
Accordingly, if no Notice of Cessation is filed, and all labor is suspended on the project for 60 straight days, the deadline to file will be affected. The revised deadline to file a California mechanics lien is 60 days after cessation of labor, along with the 90-day typical filing date, for a grand total of 150 days from the “cessation of labor” date.
- Note: Cessation of labor will also affect California stop payment notice deadlines also
Colorado
Lien filing deadline
The filing deadlines for a Colorado mechanics lien can get a bit confusing. It can vary depending on a few different factors, which can be found in C.R.S. §38-22-109.
Generally, claimants must file their CO lien statement can be filed at any time during the project, but no later than 4 months after the last date of furnishing labor or materials to the project. However, if the claimant is a laborer who didn’t provide materials to the project, then the lien can be filed anytime after the last date labor was performed, but no later than 2 months after the completion of the project.
Cessation of labor filing deadline
Further down in the same statute, the law states that abandonment of the project will be deemed equivalent to the completion of the project. Abandonment is defined by the statute as the discontinuance of all labor, work, services, and furnishing of laborers or materials for a three-month period.
Since most Colorado claimants’ deadlines are calculated from the last date of furnishing, abandonment of a project will only affect the deadline for laborers who didn’t provide materials to the project. This would be a total of 5 months from the initial cessation of labor, 3 months for abandonment, and then 2 months from “completion.”
Montana
Lien filing deadline
The Montana mechanics lien filing deadline rules are codified in Mont. Code §71-3-535. The window to file a valid MT mechanics lien is 90 days. This is calculated from one of two dates:
- The claimant’s last date of furnishing labor or materials to the project; or
- The date the owner filed a Notice of Completion.
Cessation of labor filing deadline
Under the Montana Notice of Completion statute, Mont. Code. §71-3-533, there is a definition of what constitutes the completion of a project. One of which states that the cessation from labor for 30 days will constitute the completion of the work or improvement. Therefore, if the project was suspended for 30 consecutive days the lien filing deadline will be 30 days of cessation of labor, plus the 90-day filing window, for a total of 120 days from when the project stopped.
Nevada
Lien filing deadline
N.R.S. §108.226 governs the filing deadlines for a Nevada mechanics lien. According to this, your lien claim must be filed within 90 days of either (a) the last date the claimant furnished labor or materials to the project, or (b) completion of the work; whichever is later. If a Notice of Completion is filed on the project, the deadline to file is reduced to 40 days from when the notice was recorded.
Cessation of labor filing deadline
The mechanics lien statute goes further by defining what “completion of the work” means. This is either the actual completion or final acceptance, occupation by the owner, or cessation of labor for 30 consecutive days. So, in order to file your NV mechanics lien in a timely fashion, it must be filed within 120 days from when labor stopped on the project; 30 consecutive days of cessation of labor, plus the 90-day typical filing deadline.
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