Originally Posted On: https://crmlsi.com/mechanics-lien-arizona/

Mechanics Lien Arizona Guide

If contractors and suppliers do not receive payment on a construction project in Arizona, they can file a lien to secure their payment. A mechanics lien is a legal instrument that grants the unpaid party a security interest in the property.

Mechanics liens are vital tools in the construction industry, ensuring that contractors, subcontractors, laborers, and material suppliers get paid for their work. In Arizona, the mechanics lien process is governed by specific legal requirements designed to protect these parties under the Arizona mechanics lien law.

At CRM Lien Services, we specialize in ensuring that you get paid quickly and reliably. We can prepare and file mechanics liens for you, taking into account Arizona state-specific rules and regulations. We can also help you secure your right to a lien by preparing and serving Preliminary Notices, which are required in the State of Arizona for subcontractors and material suppliers.

This page outlines the rules, requirements, and deadlines necessary for filing a mechanics lien Arizona.

Key Takeaways

• Mechanics liens in Arizona are essential tools for contractors, subcontractors, laborers, and material suppliers to secure payment for their work on construction projects. These liens grant a legal interest in the property if payment is not received.
• Arizona’s mechanic’s lien process is governed by strict legal requirements. It’s crucial to file preliminary notices within 20 days of starting work, adhere to specific filing deadlines (usually 120 days from project completion), and accurately document all required information on the lien claim form.
• If a mechanics lien is not enforced through a foreclosure action within 6 months of filing, it becomes unenforceable. Additionally, timely release of the lien upon receiving payment or upon demand is critical to avoid penalties and potential liabilities.
• Understanding and protecting mechanics lien rights is crucial. This includes serving preliminary notices, adhering to deadlines for recording liens, and taking legal actions such as filing stop notices and lien foreclosure actions.

Who Can File an Arizona Mechanics Lien?

In Arizona, understanding Arizona lien laws is crucial as mechanics lien protection applies broadly, covering individuals who provide labor, professional services, materials, machinery, fixtures, or tools for constructing, altering, or repairing buildings or other structures. This protection extends to most participants in construction projects, including those hired by first-tier subcontractors. However, suppliers to suppliers do not have lien rights.

Exceptions exist, particularly for owner-occupied residential projects where a written contract with the owner-occupant is mandatory. Design professionals can file a mechanics lien if they have a written contract with the owner or any contract with someone directly hired by the owner. Additionally, licensing is required for claimants performing work that necessitates licensure.

Is a Written Contract Required to File a Mechanics Lien in Arizona?

Work on a construction project can unexpectedly halt, as seen during events like the COVID-19 crisis in the industry. Such stoppages, including those caused by COVID-19, can significantly affect the timing and process of filing your mechanics lien claim in Arizona.

Your lien deadline in Arizona is typically calculated from the completion of the entire project or the recording of a notice of completion. However, a project is also considered “complete” — triggering your lien deadline — if there is a cessation of labor lasting 60 consecutive days, unless this cessation is due to a strike, material shortage, or Act of God.

Can an Unlicensed Contractor File an Arizona Mechanics Lien?

No, individuals who are required to be licensed as contractors but do not hold a valid license do not have lien rights in Arizona. This requirement also applies to design professionals, who must possess a valid certificate of registration to exercise lien rights.

The Arizona Registrar of Contractors (AZ ROC) is responsible for setting and enforcing these licensing rules and requirements for contractors across the state. Ensuring compliance with these regulations is crucial for maintaining eligibility to file mechanic’s lien, protecting the rights of those involved in construction projects throughout Arizona.

When Is the Deadline to File an Arizona Mechanics Lien?

The deadline to file a lien against property in Arizona varies based on whether a Notice of Completion has been filed for the job:

• Typically, a mechanics lien must be filed within 120 days of project completion. This deadline starts from the last date of work or furnishing of materials.
• However, if a Notice of Completion has been recorded by the property owner, the lien must be filed within 60 days after the recording of the Notice of Completion. This notice signals the end of the project and triggers the lien filing deadline. Additionally, a preliminary twenty-day notice must be served to the owner, original contractor, and construction lender within twenty days of the claimant’s first furnishing of labor or services, as outlined in Arizona Revised Statutes § 33-992.01.

These timelines are critical for contractors, subcontractors, and suppliers to protect their rights and ensure timely filing of mechanics liens under Arizona law.

What Information Should Be Included in an Arizona Mechanics Lien?

An Arizona Notice & Claim of Lien is regulated by Ariz. Rev. Stat. §33-993 and must include the following details:

• Description of the property
• Name of the property owner or reputed owner
• Name of the hiring party
• Statement detailing the terms, time given, and conditions of the contract (if oral) or a copy of the written contract
• Amount of the lien, adjusted for any credits or offsets
• Date of project completion
• Date when the preliminary notice was served
• Copy of the preliminary notice and proof of service
• Name of the construction lender and the requirements for serving notices to the construction lender

Ensuring all these elements are accurately included is essential for the validity and enforceability of the mechanics lien in Arizona.

How to File an Arizona Mechanics Lien?

Our step-by-step guide will lead you through each necessary step to qualify for and file a mechanics lien in Arizona. We detail the required notices, essential information for the Arizona mechanics lien form, and crucial tips for submitting it to the county office for recording.

1. Obtain the correct form: Download a blank Arizona Claim of Lien form. Our forms, crafted by construction attorneys, adhere to Arizona’s mechanics lien laws’ specific language and formatting requirements, ensuring compliance is straightforward.
2. Complete the form: Accuracy is paramount. Arizona’s mechanics lien laws are stringent regarding required details and information. Errors on the lien form can invalidate your claim. Ensure all information, such as legal names of parties, property description, and claim amount, is meticulously reviewed for accuracy.
3. Consult Arizona construction attorneys: Utilizing the expertise of Arizona construction attorneys can help ensure your lien filing is accurate and compliant with Arizona lien laws. They can provide valuable insights and assistance in successfully filing liens for construction workers and suppliers.
4. File your lien: Submit your completed form to the recorder’s office in the Arizona county where the property resides and pay the recording fee. Refer to our comprehensive list of Arizona recorder’s offices for contact details, fees, and specific filing requirements.
5. Serve the owner: Following the lien’s recording, serve a copy promptly to the property owner.
6. After filing: Note that an Arizona mechanics lien remains valid for 6 months. It’s crucial to enforce your lien claim before this deadline expires.
7. Release of lien: If payment is received, file a lien release form within 20 days to discharge your lien claim.

Following these steps diligently ensures compliance with Arizona’s mechanics lien laws and enhances the effectiveness of your lien claim.

How to Protect Your Lien Rights in Arizona?

Every participant on a construction project seeking to safeguard their lien rights in Arizona must issue a 20-day preliminary notice. This notice should be dispatched within 20 days from the first provision of labor or materials to the project. While late service remains effective, it covers only labor and materials supplied during the 20 days before the notice and thereafter.

For Arizona preliminary notices, a noteworthy requirement is that typically, only one notice is necessary, unlike states such as Texas where monthly notices are mandated. However, an additional notice may be required if the value of furnished labor or materials exceeds the amount stated in the original notice by more than 20%.

As of projects beginning on or after December 31, 2019, this revised notice is mandated only if the price surpasses 30% of the original notice amount. For more details, refer to the discussion on Arizona’s change from the 20% rule to the 30% rule effective December 2019.

How to Release an Arizona Lien Claim?

If you have received payment, you must release the lien within 20 days of satisfaction. Additionally, if a lien has been improperly filed on an owner-occupied residential property, it must be released within 20 days of receiving a written demand to do so. Failing to release the lien within these specified periods can result in the claimant being liable for $1,000 and any actual damages incurred.

How to Enforce an Arizona Lien Claim?

If payment has not been received, an Arizona mechanics lien must be enforced through a lien foreclosure action within 6 months of its filing. Failure to initiate this action within the 6-month period will result in the expiration of the lien claim, rendering it unenforceable. Upon filing the action, the claimant must also record a Lis Pendens in the county clerk’s office within 5 days.

Get in touch

At CRM, we have been serving customers in Arizona and across the United States with mechanics lien and preliminary notice services since 1986. We have a wealth of expertise, are licensed and insured, and our team is made up of highly knowledgeable document processors.

If you’re looking for a straightforward process for filing a mechanics lien give us a call or shoot us an email. We would love to work with you and help you lower your risk and get paid fast!

Talk to us. We’re here to help.