Stop Payment Notice can be used on both private and public construction projects in California to secure amounts owed for labor, services, or materials contributed. But strict deadlines apply to establish and maintain stop payment notice. The deadlines applicable to stop payment notice are the subject of this post.
Deadlines Applicable to Stop Payment Notice
The first deadline for Stop Payment Notice that must be met to establish the right to a Stop Payment Notice is the deadline to send 20 day preliminary notice.
What Is The Deadline For Sending a 20 Day Preliminary Notice In California?
Within 20 days of commencing work on a project Preliminary notice must be sent. (Civil Code § 8204.)
Who Must Give Preliminary Notice on a Private Project?
On private projects, all claimants that do not have a direct contract with the project owner must give preliminary notice to have stop payment notice rights. (Civil Code § 8200.) A direct contractor must also give preliminary notice to any construction lender. (Civil Code § 8200(e)(1).)
Who Must Give Preliminary Notice on a Public Project?
On a public project, everyone must give preliminary notice with the exception of the direct contractor and subcontractors with a direct contract with the direct contractor. (Civil Code § 9300.)
What Is The Consequence Of Sending Preliminary Notice Late?
If preliminary notice is not sent within 20 days of commencing work, stop payment notice rights will not be enforceable with respect to amounts owed for work performed more than 20 days before preliminary notice was given. (Civil Code § 8204.)
Deadlines Applicable To Giving Stop Payment Notice
The next deadline applicable to stop payment notice is the deadline for giving stop payment notice.
What Is The Latest Stop Payment Notice May Be Given On A Private Project?
On a private project, the latest stop payment notice may be given in California is determined by either actual project completion by all trades, a continuous cessation of labor for 60 days, or the recording of a timely notice of completion or notice of cessation. In the case of actual completion or a continuous cessation of labor for 60 days, the deadline to give stop payment notice is 90 days from the date of actual completion or from the last day of the 60-day cessation of labor. (Civil Code §§8180, 8412, 8508) In the case of a notice of completion or notice of cessation the deadline to give stop payment notice is 30 days from the date stated in the notice for direct contractors and 60 days from the date stated in the notice for everyone else. (Civil Code §§8182, 8188, 8508)
What Is The Latest Stop Payment Notice May Be Given On A Public Works Project?
On a public works project, the latest stop payment notice may be sent in California is determined by either actual project completion by all trades, a continuous cessation of labor for 60 days, or the recording of a timely notice of completion or notice of cessation. In the case of actual completion or a continuous cessation of labor for 60 days, the deadline to give stop payment notice is 90 days from the date of actual completion or from the last day of the 60-day cessation of labor. (Civil Code §§8180, 9356) In the case of a notice of completion or notice of cessation the deadline to give stop payment notice is 30 days from the date stated in the notice. (Civil Code §9356)
Deadlines Applicable To Enforcing a Stop Payment Notice
The final stop payment notice deadline that must be adhered to in order to compel an owner, lender or public entity to withhold and ultimately disburse to a claimant money owed, is the deadline to file a lawsuit to enforce stop payment notice. Failure to timely file an action in superior court to enforce stop payment notice will cause the stop payment notice to expire, freeing the noticed party from withholding the money subject to the notice any longer.
What Is The Deadline To Enforce Stop Payment Notice By Filing A Lawsuit?
The deadline to file a lawsuit to enforce stop payment notice in California is 90 days from the deadline to give stop payment notice. (Civil Code §§ 8550, 9502.) Absent a notice of completion this deadline is 180 days from project completion or 240 days from the commencement of a continuous cessation of labor. On private projects, for a direct contractor, the deadline to file a lawsuit to enforce stop payment notice will be 150 days from the date stated in a timely notice of completion or notice of cessation. On private projects for everyone else, and for everyone on public projects, the deadline to file a lawsuit to enforce stop payment notice will be 120 days from any valid notice of completion or cessation.
What is the Earliest an Action to Enforce Stop Payment Notice May be Filed?
A lawsuit to enforce stop payment notice can be brought no sooner than 10 days after giving the stop payment notice. (Civil Code §§ 8550, 9502.)