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General contractors must sent a preliminary notice on private projects.
Sending notice is a vital part of preserving your lien rights as a general contractor.
General contractors are not required to send notice on public projects.
Since GCs will not make a claim against their own bond for non-payment, they do not have bond claim rights, and have no preliminary notice requirement.
Subcontractors and suppliers must send preliminary notice on private projects.
A person performing actual labor for wages is not required to serve notice.
2nd-tier subcontractors must send notice on public projects. Suppliers must submit one no matter what.
It is a good idea to also send the notice to the public entity and the surety, especially as some bonds require the surety to be informed.
An Arizona Preliminary notice is a legal document sent out on construction projects to provide information to the parties in charge of payment. Also referred to in Arizona as a 20-day notice, since it needs to be sent within the first 20 days of first furnishing labor and materials to the project.
Arizona’s preliminary 20-day notice also works to protect and secure the right to file a mechanics lien or bond claim if unpaid; depending on the type of project.
• Read more in our Ultimate Guide to Arizona’s 20-Day Preliminary Notice
Arizona law requires that every project participant, with the exception of wage laborers, must send a preliminary 20-day notice. This includes every person who furnishes labor, professional services, materials, machinery, fixtures, or tools for which a lien otherwise may be claimed.
It’s always a good idea to send preliminary notices whether or not they are required – but it’s especially important to send a 20-day notice on every Arizona project. The failure to provide a preliminary 20-day notice is fatal to mechanics lien rights in Arizona.
An Arizona preliminary notice must be given no later than 20 days after the claimant has first furnished labor or materials for the full mechanics lien or bond claim protection. However, a late notice can still be effective to an extent, see more in the following question.
• For more information, check out the answer to this question from an Arizona supplier: Project start date- when equipment ships or delivers?
If a claimant fails to send preliminary notice within 20 days of first furnishing, all is not lost. The notice may be provided later than the 20 day deadline, but it will only secure rights for the value of labor or materials provided in the 20 days preceding the receipt of the notice, and everything provided thereafter.
This is specifically set forth by ARS 33-992.01(E) which states that a party is “not precluded from giving a preliminary twenty day notice” at any time after 20 days from that party’s last furnishing of labor or materials to the job, but that any subsequent lien (or bond claim) is limited to only “such labor, professional services, materials, machinery, fixtures or tools furnished within twenty days prior to the service of the notice and at any time thereafter.”
Therefore, even if you’ve missed the 20-day deadline, the notice should be sent anyways. Securing some lien or bond rights, is better than losing out entirely.
The Preliminary 20-day Notice must be delivered either by first class mail (with a certificate of mailing), or by registered or certified mail, with the sender obtaining a certificate of mailing, receipt of registration, or receipt of certification.
Arizona also requires proof that the notice was given, either by acknowledgement of receipt by signature of person receiving notice, or by “Affidavit of Proof of Service” accompanied by the certificate of mailing or receipt of certification or registration if the person on whom the notice was served fails to complete an acknowledgment within 30 days. The proof of service should be in substantially the same form as provided under ARS §33-992.02.
• For more on this, see the answer to this Arizona subcontractor’s question: Do 20-day preliminary notices have to be sent certified and with return receipt?
The requirement to send a preliminary notice is fulfilled upon mailing. This is made clear by ARS § 33-992.01(F) which provides that “service is complete at the time of the deposit of notice in the mail.” Further, courts have held that “actual receipt” of the notice is not even required.
So long as the notice is mailed to the right place in the right way, the potential claimant has satisfied its obligations even if the owner refuses to receive the notice. Which means that a notice can technically be sent out on the 20th day of work on the project, and still be timely.
• Consider this article about what to do when the property owner refuses to acknowledge receipt of a notice.
An Arizona preliminary notice must be served on the owner (or reputed owner), the general contractor, the construction lender (if any), and the hiring party (i.e. the party with whom you have contracted with).
Generally, it’s impossible to send too many preliminary notices in Arizona. If you’re not sure if you should send someone a notice, Arizona court decisions have suggested that you’re not wrong to go ahead and send it. Essentially, Arizona contractors and suppliers should send notice to everyone up the contracting chain.
If you don’t know who the construction lender is, or if there’s even a construction lender on the project, you can make a request for this information along with the preliminary notice.
Arizona requires a lot of information and text to be included in a 20-Day Preliminary Notice form. Generally speaking, the following information must be included in the preliminary notice:
• A general description of labor, services, or materials furnished or to be furnished
• An estimate of the total contract price
• A legal property description of the improvement
• Claimant’s name & address
• Hiring party’s name & address
• Notice language in bold-faced font provided in A.R.S. §33-992.01(C)(5).
If you’re concerned about inaccurate information, the notice language has you covered, as it includes, “Within ten days of receipt of this preliminary twenty day notice the owner or other interested party is required to furnish all information to correct any inaccuracies in the notice pursuant to Arizona Revised Statutes section 33-992.01, subsection I or lose as a defense any inaccuracy of that information.”
If a claimant receives the notice that some of the information is inaccurate, a revised notice should be sent within 30 days.
Depends. Arizona Preliminary notices require an “estimated total contract price.” If, as the project progresses, the value of the labor, materials, or services exceeds 30% of the amount provided in the notice, and Arizona Amended Preliminary Notice form must be sent to cover the additional contract value.
• This is referred to as the Arizona 30% preliminary notice rule, previously the 20% rule, but the law was amended in December 2019 to increase protections for contractors.
• For more information on amended preliminary notices: Do I include the original value in the excess preliminary notice or just the difference?
An Arizona Preliminary notice is a legal document sent out on construction projects to provide information to the parties in charge of payment. Also referred to in Arizona as a 20-day notice, since it needs to be sent within the first 20 days of first furnishing labor and materials to the project.
Arizona’s preliminary 20-day notice also works to protect and secure the right to file a mechanics lien or bond claim if unpaid; depending on the type of project.
• Read more in our Ultimate Guide to Arizona’s 20-Day Preliminary Notice
Any claimant that doesn’t have a direct contract with the prime contractor (GC) is required to send a preliminary notice in order to secure their right to make a claim against the payment bond.
General contractors are the parties obtaining the payment bond for the protection of sub-tier participants. Since a GC has no rights against their own bond for nonpayment, a GC has no notice requirements on a public project.
Furthermore, Arizona does not technically require a first-tier subcontractor (a sub contracting with the GC directly) to provide a preliminary notice on an Arizona public project in order to retain the right to make a later bond claim. However, providing such a notice is best practice.
An Arizona preliminary notice must be given no later than 20 days after the claimant has first furnished labor or materials for the full mechanics lien or bond claim protection. However, a late notice can still be effective to an extent, see more in the following question.
• For more information, check out the answer to this question from an Arizona supplier: Project start date- when equipment ships or delivers?
If a claimant fails to send preliminary notice within 20 days of first furnishing, all is not lost. The notice may be provided later than the 20 day deadline, but it will only secure rights for the value of labor or materials provided in the 20 days preceding the receipt of the notice, and everything provided thereafter.
This is specifically set forth by ARS 33-992.01(E) which states that a party is “not precluded from giving a preliminary twenty day notice” at any time after 20 days from that party’s last furnishing of labor or materials to the job, but that any subsequent lien (or bond claim) is limited to only “such labor, professional services, materials, machinery, fixtures or tools furnished within twenty days prior to the service of the notice and at any time thereafter.”
Therefore, even if you’ve missed the 20-day deadline, the notice should be sent anyways. Securing some lien or bond rights, is better than losing out entirely.
The Preliminary 20-day Notice must be delivered either by first class mail (with a certificate of mailing), or by registered or certified mail, with the sender obtaining a certificate of mailing, receipt of registration, or receipt of certification.
Arizona also requires proof that the notice was given, either by acknowledgement of receipt by signature of person receiving notice, or by “Affidavit of Proof of Service” accompanied by the certificate of mailing or receipt of certification or registration if the person on whom the notice was served fails to complete an acknowledgment within 30 days. The proof of service should be in substantially the same form as provided under ARS §33-992.02.
• For more on this, see the answer to this Arizona subcontractor’s question: Do 20-day preliminary notices have to be sent certified and with return receipt?
The requirement to send a preliminary notice is fulfilled upon mailing. This is made clear by ARS § 33-992.01(F) which provides that “service is complete at the time of the deposit of notice in the mail.” Further, courts have held that “actual receipt” of the notice is not even required.
So long as the notice is mailed to the right place in the right way, the potential claimant has satisfied its obligations even if the owner refuses to receive the notice. Which means that a notice can technically be sent out on the 20th day of work on the project, and still be timely.
• Consider this article about what to do when the property owner refuses to acknowledge receipt of a notice.
On a public works project in Arizona, the preliminary notice is only required to be sent to the general contractor.
However, it is best practice to also give the notice to the public entity in charge of the work, and to the surety. Many bonds require the surety to be informed of a payment dispute prior to a claim being made, and fighting about notice to the surety is the last thing a claimant wants to do during a payment dispute and potential bond claim.
For Arizona public projects, there required information on 20-Day Preliminary Notice forms is generally the same as private projects:
Depends. Arizona Preliminary notices require an “estimated total contract price.” If, as the project progresses, the value of the labor, materials, or services exceeds 30% of the amount provided in the notice, and Arizona Amended Preliminary Notice form must be sent to cover the additional contract value.
• This is referred to as the Arizona 30% preliminary notice rule, previously the 20% rule, but the law was amended in December 2019 to increase protections for contractors.
• For more information on amended preliminary notices: Do I include the original value in the excess preliminary notice or just the difference?
Is this a project for the government or a private project? You note that the GC can no longer do projects for the State of Arizona so that brings up this question. This matters.
Your post then brings up secondary questions. You say the GC terminated your other contracts. Do those contracts allow unilateral termination on notice and without cause by the GC? As for future contracts, the same point is at issue. A contract is enforceable on acceptance and cannot be terminated unless the contract allows that right. If all these contracts allowed the GC to terminate, that was an unfortunate contract term to accept. Have your attorney closely review your contracts.
With that out of the way, to your question. If this is a private contract, contractors are required to record their notice and claim for lien within the earlier of 120 days after completion or, if a notice of completion has been recorded and served, within 60 days after such recording. ARS § 33-993(A).
Completion means the earliest of either 30 days after final inspection and written final acceptance by the governmental body issuing the building permit, or cessation of labor for a period of 60 consecutive days, except when such cessation is due to a strike, shortage of materials, or act of God. ARS § 33-993(C). If your contract was terminated, then this is a cessation of labor.
Assuming you timely served preliminary notice, make sure to timely file the lien. If you don't have a construction attorney, reach out to a construction attorney for advice. Our office provides free initial consultations
Robert Murillo
robert@pivotallegal.com.
If this is for the same parcel of property and amends the original contract, then you may have to file an amended preliminary notice. If the updated total price exceeds by 30% (I assume the contract was at or after 2020) the estimated total price provided in your preliminary lien, you must serve an additional preliminary notice. If you do not this, that may result in a monetary limit in your recovery if you must foreclose on the lien. You cannot send some "an additional amount" preliminary notice. It must be an amendment that covers the total new amount, if it hits the threshold noted.
There is no way around this. Do not do this or do this incorrectly and you risk a recovery amount below the amount that could be at issue.
Retain an attorney to avoid mistakes. The cost for the attorney to protect your business is a fraction of the cost of mistakes that will be made.
Feel free to reach out with questions.
Robert Murillo
robert@pivotallegal.com.
Thank you for reaching out to our legal community. Your question might be too specific for an attorney to answer in this public forum. You may wish to consider consulting an attorney privately. Here are some attorneys from our directory in your area: https://www.levelset.com/payment-help/experts/construction-lawyer/arizona/
Hope this helps!
In Arizona, nearly every party on a construction project must send a preliminary notice to the property owner, general contractor, and lender (if one exists). Arizona Revised Statute 33.992-01 requires every person who furnishes labor, professional services, or materials to send a preliminary notice in order to reserve the right to file a mechanics lien or a bond claim.
Arizona statute calls this notice a Preliminary Twenty Day Lien Notice. However, it’s also often called a pre lien notice because it’s required before a claimant is allowed to file a mechanics lien in Arizona if they are not paid. Arizona’s notice requirement is strict. Read our Ultimate Guide to Arizona’s 20 Day Preliminary Notice for step-by-step guidance on how to prepare and send your Arizona notice.
On private projects: In Arizona, there is no exception for direct contractors. Even parties that contract directly with the property owner are required to deliver a preliminary 20-day notice to the property owner, as well as to the construction lender, if any. In fact, it appears that the statute technically requires a direct contractor to send a preliminary notice to themselves!
Arizona’s direct contractor pre lien requirement is different than the law in many states, which treat preliminary notices as tools to identify sub-tier participants to the owner, as the owner would otherwise not know who may have potential rights against the property. The only exception is that wage laborers (employees of construction participants) are not required to provide the 20-day notice.
On public projects: Only those who didn’t contract directly with the general (prime) contractor is required to sent notice to secure their bond claim rights. Although first-tier subcontractors, i.e. those hired directly by the GC aren’t required to send notice, it’s best practice to send one anyways.
Additionally, while some states have exceptions to notice requirements provided the owner (or other applicable parties) had actual knowledge of a party’s involvement on the project, or had a deep enough connection to the project that they “should have” had actual knowledge, Arizona does not. In Arizona, the only notice that matters is formal notice.
Arizona’s preliminary notice requirements have both rare, and completely unique aspects. A relatively rare requirement for Arizona preliminary notices is that the notice must contain an estimated total contract amount. This is a specific statutory requirement, but some participants refuse to include that required information on their notices, as it could expose the GC’s mark-up to the property owner, and (presumably) cause friction in the relationship between the sub and the GC.
One other unique aspect to Arizona’s preliminary notice law is that the notice itself must contain an acknowledgment of receipt for the receiving party to sign and return, which proves compliance with the notice requirements.
Download a free Preliminary 20-Day Notice form that meets Arizona’s statutory requirements.
There’s a reason it’s called a “20-Day Notice.” In order to fully protect their lien/bond rights, Arizona construction parties must provide notice within 20 days of the date they first furnish labor or material to the project.
Missing the deadline doesn’t necessarily mean giving up your Arizona lien/bond rights entirely. An Arizona preliminary notice can be given at anytime, but if it is provided more than 20 days from first furnishing it only protects the amounts due for labor or materials furnished beginning 20 days prior to the date on which the notice was given.
If a contractor or supplier fails to provide an Arizona preliminary notice to any of the required parties, they are not allowed to file a lien in Arizona.
If change orders or other alterations result in a contract price increase exceeding a certain threshold, Arizona requires parties to send a revised preliminary notice.
If the project began:
The first step is to read the guide to the Arizona 20-day preliminary notice. This comprehensive notice walks you through everything you need to know: who has to send notice, what information must be included on the notice, who the notice should be sent to, when the notice should be sent, and much more.
Next, download a free copy of the Arizona 20-day notice. Arizona construction law is very specific as to how these documents must be worded and formatted. Levelset’s free forms were written by construction attorneys to meet these requirements, making this part easy to get right.
This part can get tricky. That’s because you need to take extra care when filling your Arizona 20-day notice out. Making a mistake when preparing your form could mean you lose your right to file a mechanics lien in case you’re left unpaid down the line. Make sure everything is completely accurate.
Lastly, deliver your Arizona 20-day notice. The notice must be delivered either by first class mail (with a certificate of mailing), or by registered or certified mail, with the sender obtaining a certificate of mailing, receipt of registration, or receipt of certification.
Be sure you send your notice to the appropriate parties within the appropriate deadline, and provide proof the notice was delivered properly.
Select Preliminary Notice document.
Provide basic job information.
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