5- The Stop Notice Option- How Do You Get Paid
You can serve your Stop Notice at any time during the course of a project but doing so just preserves the funds to pay you; it does not get you paid any sooner. It is also the case that if others serve Stop Notices on the project, then yours will just be one of the many that are on file with the Owner or Lender.
We will do a quick review of the timeframes for serving your Stop Notice because this is critical. As you know, you can serve the Stop Notice at anytime during the course of the work. Once the work completes though and depending on what the Owner does or does not do, you have different time limits to get your Stop Notice served.
For private works, if the Owner files a Notice of Completion or a Notice of Cessation and you are a subcontractor, the last day you can serve your Stop Notice is 30 days from the date the Notice is recorded. If you are a General and have filed a Stop Notice with a lender, then you have 60 days from the date the Notice of Completion is recorded.
If the Owner does not file either document but takes possession, or in some way indicates that the project is accepted, then regardless of your status, you have 90 days. By the way, these timeframes also apply to suppliers.
If the job just stops because it is for all intents complete, but the Owner does nothing, then after 60 days of continuous non-activity, you will have 90 days to serve the Stop Notice. If the work stops for that 60 day period, then the project is deemed complete. Therefore you have 150 days within which to serve the Stop Notice from the date the work stopped- 60 + 90. You can serve a Stop Notice anytime during the project and up until the last date that you could file a Mechanics Lien on the project.
It’s a little different for public works. First, only subs are going to file Stop Notices. Second, the same timeframes apply if there is a Notice of Completion or Cessation recorded- 30d to file your Stop Notice. It gets a little complicated if there is no of Completion or Cessation recorded.
If the work is stopped and not completed, then after 30 days it is deemed complete and you will have 90 days from that date to serve the Stop Notice; effectively 120 days (30 +90). However if the work is completed and the work is subject to acceptance by the public agency, and that Notice of Acceptance is provided, then you will have 90 days from that Notice of Acceptance date to serve your Stop Notice.
It is a confusing area of the law so be aware. Courts sometimes have difficulty with these different timeframes so be sure you understand what it happening and when you need to get the Stop Notice filed. One way to be sure to know when the last day to file a Stop Notice will be is to include $10 with your Stop Notice. This will require the public agency to let you know when a Notice of Completion or Notice of Acceptance is recorded.
You want to know this so that you can either serve additional and updated Stop Notices and/or you will know when the last day is for you to file your lawsuit. You have 90 days from the recording of either to file the litigation. If you pay the $10 but the public agency does not give you notice, then they cannot defend by asserting the statute of limitations has run. It is $10 well spent if you are working on a public project.