Monthly Archives: March 2014

Making the Arizona Lien Law work for you

Do you need to file a Mechanics Lien in the state of Arizona? If so, you should be aware of several key statutes included in Arizona’s Lien Law. While these provisions have been designed to protect your Lien Rights, failure to comply with the law exactly as it is written may invalidate your Mechanics Lien claim and result in loosing the protection provided by the Arizona lien law , to secure your unpaid job related accounts receivable. We’ve highlighted a few of the most basic provisions of the Arizona Lien Law. It’s important to note that this article is not intended to be an all-inclusive discussion of the Arizona Lien Law, but it does contain basic provisions designed to help you understand your Lien Rights and responsibilities.

Here are a few things you should know before filing a Mechanics Lien in Arizona:

  1. All parties who want to protect their lien rights, must deliver an Arizona Preliminary Notice to the owner of the property, prime contractor, and construction lender within 20 days of providing materials and labor for the project. According to this provision, every person who furnishes labor and/or provides services and materials to a project is required to file a 20 Day Preliminary Notice to establish their Rights to claim a lien.
  2. In Arizona, the Mechanics Lien must be filed within 60 days of filing a Notice of Completion. If a Notice of Completion has not been filed for the specific project, claimant then has 120 days following the completion of the improvement to record a Mechanics Lien.
  3. Action to enforce the Mechanics Lien must be filed within 6 months of recording the Mechanics Lien. Failing to file an action to enforce the Mechanics Lien will result in your recorded Mechanics Lien becoming delinquent an unenforceable.
  4. Anyone who furnishes labor, materials, fixtures, professional services, or tools in the improvement, repair, construction, or alteration of any building or structure in relation to a contract with the Owner (or agent of the Owner) may file a Mechanics Lien in Arizona. It’s important to note that the law does not require you to be in direct contract with the Owner or agent of the Owner; however, in order to file a Mechanics Lien, the project must have evolved from such a contract.
  5. Arizona’s Lien Law allows those with lien rights to make a good faith estimate of the total contract price identified in the Preliminary Notice. However, unlike most states, Arizona’s Lien Law incorporates the 20% rule, this is detailed in §33-992.01(G) and (H):

“G) A person required by this section to give notice…need give only one notice…with respect to all labor, professional services, materials, machinery, fixtures or tools furnished…unless the actual estimated total price…exceeds by twenty per cent or more the total price in any prior original or subsequent preliminary notice…

(H) If a notice contains a general description…of the labor, professional services, materials, machinery, fixtures or tools furnished up to the date of notice, it is not defective because after the date the person giving notice furnishes labor, professional services, materials, machinery, fixtures or tools that are not within the scope of the general description, or exceed by less than twenty per cent the estimated total price thereof.”

These are just a few key provisions included in Arizona’s Mechanics Lien Law. There are many more that are just as important to the success of your Mechanics Lien. Don’t risk your Mechanics Lien Rights by trying to navigate the process on your own – You are wise to consult a Professional Preliminary Notice and/or Mechanics Lien Service, to prepare and serve your Arizona Preliminary Notices and Mechanics Liens. While there are many reasons to use a professional Preliminary Notice and Mechanics Lien Service, one of the best reasons is to use a company whose business model calls for the research and verification of all of the information needed to prepare a solid preliminary notice .

Quite often the information gathered by your sales force or customer service team may list a business owner and not the property owner. The job address referenced on your clients work order may be completely different than the address actually being improved. Any misinformation entered into the initial Preliminary Notice may end up on your Mechanics Lien document and render your open accounts receivable as UNsecured.

CRM Lien Services will thoroughly research and verify all of the information included in your Preliminary Notice and/or Mechanics Lien. They will be sure to use the most current formats and language as required by statute and serve your notice within the specified time. They will also send you a courtesy copy of the served notice, complete with certified mailing numbers for each entitiy served, and they will deliver this to you via email within minutes of the actual serving.

If you would like to request a proposal or just learn more about this service, click here.