Projects in Multiple States? Check to See if a Notice of Completion Matters for You
Notice of Completion Laws Are Important
If you perform work in multiple states, it's very important you learn the specific rules dealing with Notices of Completion for each state you work in. Notice of Completion laws are important because they can significantly reduce the time you have to file a lien on a project and, depending on the state, you may not even directly receive the notice.
Different Laws for Different States
Notice of Completion is a notice filed in the public record meant to notify potential lien claimants that a project is complete. This notice starts the clock running on your deadline to file a mechanic's lien against the property. While the idea is simple enough, how states administer these rules vary wildly.
States with and without these laws
The first thing you need to figure out is whether the state you're working in has Notice of Completion laws. Some don't. Some require filing a Notice of Completion by the Owner every time a construction project is completed. Other states don't require the filing, but if one is filed, your lien rights are affected.
You Must Be Proactive
Next, you need to know if and how you will receive the Notice of Completion. Some Notice of Completion states require the Owner send the Notice of Completion to all potential lien claimants on the job in addition to the public filing. Other states only require the public filing, so you have to take the initiative to watch the public records where the project is located to accurately calculate your time period for filing a lien. Whether or not you receive notice, your deadline to file liens will be running so you must be proactive in learning how Notices of Completion are handled in the state you're working in. Learn about what else you can do to be more informed on your projects here.
Know Your Timeline
It's easy to get confused when calculating the deadline to file your lien in Notice of Completion states. Many states have laws which calculate the deadline from the time you complete your work but immediately changes the minute a Notice of Completion is filed. You may have 90 days from the day you finished your work to file a lien but if a Notice of Completion is filed the next day for the project, your window to file a lien may immediately drop to 30 days. Again, these time periods vary from state to state, which is why it is important you learn the Notice of Completion laws in each state you work in.
Notice of Cessation?
Finally, to ensure confusion, some states call it a "Notice of Cessation" instead. Make sure to check what they call this notice in the state your project is in. The difference is in the name alone, the laws themselves however have the exact same affect.
Lien laws are confusing by design
The bottom line is you need to understand enough about Notice of Completion/ Cessation laws to find out if they apply to your project and how they impact your work. Lien laws are confusing by design, especially in states that favor owner rights over contractor rights. When your rights to payment are at stake in a complex lien law state, consult a lien law attorney to protect your rights.
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