If you haven’t been paid for work or materials you provided on an Arizona construction project, you generally have the right to file a mechanics lien. This article will guide you through process, showing you how to file a mechanics lien in Arizona.
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Before you file: Be sure you have mechanics lien rights in Arizona
On private construction projects, anyone who furnished “labor, materials, professional services, fixtures, or tools, in the construction, alteration, repair, or improvement of any building…” is entitled to file a mechanics lien in Arizona.
This is a fairly broad definition that includes nearly everyone who furnishes to a construction project. In reading the definition recognize that you are not required to have a contract with the owner or agent of the owner, but instead, the project itself must simply evolve from a contract with the owner or agent of the owner. Typically, of course, these contracts are entered into by general contractors.
These parties don’t have lien rights in AZ
Just as important as who can lien a project is who cannot. Here are three rules in Arizona limiting who can file mechanics liens:
- Design professionals can only file a mechanics lien if they have a written contract with the property owner, or, a written or oral contract with an architect who has a written contract with the property owner. Otherwise, they do not have the right to file.
- On owner-occupied residential projects, a mechanics lien can only be filed by those who have a written contract with the owner. Without a written contract with the owner, you cannot file a mechanics lien on these project types.
- Suppliers to suppliers cannot file a mechanics lien under any condition (Suppliers to Suppliers always get short stick in mechanics lien law).
How to file a mechanics lien in Arizona
Steps to file an Arizona mechanics lien
- Fill out a mechanics lien form
You’ll need to provide information about the property, the claim you’re making, and the contact information for the property owners and other parties on the construction project. Make sure you start with the right form – Arizona law is rather strict about the document itself. Fill out the fields completely and accurately.
- File your lien with the county recorder
Deliver your completed lien form to the county recorder’s office in the Arizona county where the property is located. You can do this in person or by mail. Most counties allow you to file electronically. You’ll also need to pay the filing fee.
- Serve a copy of the lien on the owner
Send a copy of your lien to the property owner by registered or certified mail. Arizona law doesn’t provide a specific deadline; it only states that you need to serve the lien within a “reasonable time.”
Step 1: Preparing your Arizona mechanics lien form
It is crucial that your Arizona mechanics lien contains all the information required by statute. The failure to include the proper information can be as fatal to a lien claim as not getting it filed on time, or not sending it to the appropriate parties. Arizona requires certain information set forth by statute to be included on the mechanics lien.
Not surprisingly, getting all of the necessary construction project information to manage lien rights completely and accurately is an industry-wide challenge. Let’s take a look at what information you need on your claim.
Get the right lien claim form
So this may seem obvious, but as we’ve already established, the legal requirements for the form are pretty strict. Not to mention, there are a ton of websites and companies that offer mechanics lien claim forms. The problem is that there’s no guarantee that they’re legit. An incorrect form will immediately be rejected, wasting more time with the deadline clock already ticking.
It’s important to point out that the state of Arizona is particularly strict about the formatting of the lien claim document itself. This includes anything from legibility on electronic submittals, font size no smaller than 10pt type, and extensive margin requirements as well. All of the requirements for submittals to the county recorder’s office are laid out in A.R.S. §11-480.
Levelset forms are created and reviewed by construction attorneys and payment experts; thousands of Arizona contractors and suppliers have successfully used these forms to get paid.
Information to include on your Arizona mechanics lien form
It’s time to put pen to paper, and get your lien claim filled out. The information you need is laid out in Ariz. Rev. Stat. 33-993. Some of them are pretty self-explanatory, but some of them can be trickier than they appear. Let’s break down what you need to know to get this form done right.
1. Description of the property
The state of Arizona requires a full legal description of the property that was improved; this can include things such as the lot, block, parcel, etc. A simple, physical street address just won’t cut it. Researching the legal description of the property can prove to be rather challenging. And in Arizona in particular, getting the legal description wrong can lead to varying results; if the description is even partially incorrect, it may or may not be valid. Be sure to get this section right.
For a little extra guidance, you can download our free Legal Property Description Cheat Sheet
2. Name of the owner & person who hired you
These are actually two separate sections that ask for both the owner information and the hiring party’s information. In some instances, this may be the same person. If so, just add their name and address in both sections.
The owner’s information, depending on the circumstances, can get a bit tricky. There may be multiple joint owners, the work could be commissioned by a tenant, or the property could have changed ownership throughout the project. Figuring this out may require sending a request for information, or doing a little research to find the owner on your own. As for the hiring party’s information, you should already have this. All the relevant information should be found in your contract.
3. Amount of the claim
This is the amount of unpaid wages that the lien is meant to cover. The statute describes this as the “amount of the lienor’s demand after deducting credits and offsets.” The general rule is, the amount should only include the value of labor or materials furnished. You may be owed other money through undue retainage, or attempt to include any collection or attorney costs, but those should not be included in your lien claim amount.
4. Statement of the contract terms
This section is where the claimant will provide the terms of the construction contract on which the lien claim is based. Here, you should reference that a copy of the written contract is attached to the lien claim form. If, however, there is no written contract, a simple statement outlining the terms, time for performance, and the conditions of the agreement should be provided.
5. Date of completion of the project
The date of completion is the completion of the entire project. This is determined by the earlier of two events. The first being 30 days after final inspection and written final acceptance by the government body that issued the building permit. If there was no building permit issued, then the last day that labor or materials were furnished to the job site. The other event being the cessation of labor for 60 consecutive days unless this was due to a labor strike, material shortage, or some unforeseeable act of God.
6. The date when the preliminary notice was sent
Sending an Arizona 20-day preliminary notice is a requirement to secure your lien rights and have the ability to file a valid lien claim. So it stands to reason that some information regarding this notice must be included in your lien filing. The statute requires that you include a statement of when the notice was sent. Also, to support this claim, you must attach not only a copy of the 20-day notice but also the return receipt or proof of mailing as well.
7. Sign and notarize your Arizona lien form
Arizona mechanics liens are required to be made under oath by the claimant. So once you’ve filled out all the information correctly, don’t just rush and sign it. These lien claims require notarization in order to be valid. So if you’re preparing the claim yourself, remember that once it’s done, you must wait to sign until you are in front of a notary!
Step 2. Record your Arizona mechanics lien
Once you have your lien claim form properly filled out and notarized, it’s time to file. Be sure you are fully prepared and ready to file, as there are several different things that could cause your claim to be rejected, like missing your deadline, filing at the wrong office, or forgetting the provide any additional documents. Any slip up means going through the process again, and potentially missing your filing deadline. Speaking of deadlines…
Arizona deadline to file
In Arizona, the general rule is that a mechanics lien claim must be recorded within 120 days of completion of the construction or improvement. This means the entire project, not just the individual claimant’s last day of providing labor or materials.
However, if the owner records a Notice of Completion, this deadline is cut in half, to a mere 60 days after the notice is recorded. How will you know if a notice has been recorded?
The owner who files one is legally obligated to serve a copy of the notice within 15 days to any party who sent a preliminary notice. Failure to send a copy of the notice will result in the 120-day deadline being unaffected.
Where to file your Arizona mechanics lien
All mechanics lien claims must be filed in the Arizona county recorder’s office where the property being liened is located. Be sure to file your claim is not only the right county but the right office. In an effort to make this process a bit easier, we’ve put together this list of all the county recorder’s offices in the state of Arizona, along with a link to their websites which can provide you with some additional filing information.
- Apache County Lien Filing
- Cochise County Lien Filing
- Coconino County Lien Filing
- Gila County Lien Filing
- Graham County Lien Filing
- Greenlee County Lien Filing
- La Paz County Lien Filing
- Maricopa County Lien Filing
- Mohave County Lien Filing
- Navajo County Lien Filing
- Pima County Lien Filing
- Pinal County Lien Filing
- Santa Cruz County Lien Filing
- Yavapai County Lien Filing
- Yuma County Lien Filing
What to send or bring with you to the county clerk’s office
Whether you plan on filing in person, by mail, or online, its always important to be prepared. Any deficiencies can lead to your filing being rejected, and potentially missing your deadline to file. Here are tips on what to bring or include to make sure your claim gets filed right, the first time.
- If filing your lien claim in person, bring multiple blank checks. Sure, you can calculate the filing fees ahead of time, but to err is human. Bring additional blank checks in case you’ve made a mistake. The recording fees are set at a flat rate of $30 for the first page, which doesn’t include the smaller fees for certification or additional copies.
- If filing your lien claim by mail, you will need to include a self-addressed stamped envelope with return instructions if you wish to receive a stamped copy of the recorded lien for your records.
Filing options: In person, by mail, or electronically
There are definitely some strong advantages to filing in person. Yes, this involves going down to the office and waiting in line. But in-person filing is the best option. Most notably, because your lien claim will be recorded that day. Also, if any issues arise, they can be addressed right away to avoid any undue delays.
As for mailing in your lien claim, this can get risky. First and foremost, mail takes a while, and once it’s received by the recorder’s office, it might be added to the backlog. This can potentially result in your claim not being recorded for weeks after mailing. Furthermore, remember that any problems with your filing can lead to rejection.
Lastly, there the electronic option. Many counties in Arizona allows for mechanics liens to be electronically recorded; most notably Maricopa County. Arizona county recorder’s offices can adopt this practice under the Uniform Real Property Electronic Recording Act. This has the advantage of quicker recording time, as compared to mailing in the claim. But, as noted earlier, be sure that the electronic version is clear and legible, or it will be rejected.
Step 3: Serve a copy of the lien claim to the owner
For some examples of how the court decides this, check out: When Must an Arizona Mechanics Lien Be Served on the Owner?
To avoid having the fate of your mechanics lien claim to be decided by the courts, the best practice is to send a copy the same day you filed your lien claim. “Serve” in this context, means registered or certified mail, with return receipt or certification of mailing included.
After you’ve filed your Arizona mechanics lien
Congratulations! You’ve officially recorded your mechanics lien claim. You are one step closer to getting paid what you’ve earned. But the journey isn’t over yet. There are still some actions that must be taken after your lien has been filed.
Enforce the lien claim
If you’ve filed your lien claim, and a fair amount of time has passed without payment, it may be time to consider enforcing (or foreclosing) your lien claim. The deadline to enforce a lien is 6 months from filing the lien claim, be sure to mark your calendar, so you don’t miss your deadline. In addition to filing the foreclosure action in court, you are also required to record a Notice of Lis Pendens within 5 days of filing. This is simply a notice that there is a currently legal action being taken that affects the property.
Also, if you prevail in your action to foreclose, the court can award you reasonable attorney fees. On top of that, there is the possibility of requesting interest on the amount awarded as attorney fees.
Release (or cancel) the claim of lien
Arizona laws require that once the lien is satisfied, it is the responsibility of the lienholder to release the lien. They must do so within 20 days after satisfaction, or within 20 days of the request by the owner-occupant to remove an incorrectly filed lien.
But in reality, there is no reason even to wait that long. Best practice? You should release the lien as soon as the debt has been satisfied. Failure to do so can make you personally liable for $1,000 in addition to any actual damages incurred for the failure to release the lien in a timely fashion.
Special considerations when filing an Arizona mechanics lien claim
This guide provides all you will need to know to file your Arizona mechanics lien claim validly. However, there are some special considerations to keep in mind.
Arizona is one of 3 states where a potential lien claimant has the option to file a “stop notice” in addition to, or in place of, a mechanics lien. A stop notice is basically a notice that is sent to stop or freeze project funds that have yet to be paid. Any person who is entitled to record a lien, besides the original contractor, can serve a stop notice on the owner.
As far as sending stop notices to the construction lender, any party with lien rights (including the direct contractor) may send a stop notice. The deadlines to send stop notices is the same as filing a lien claim; 120 days, or 60 days if a Notice of Completion is filed.
Owner-occupied residential projects
If the project is an owner-occupied residential project, only parties contracting directly with the property owner are allowed to file a mechanics lien. This is important to consider before attempting to file a mechanics lien.
Since owner-occupied residential projects are, generally speaking, smaller in scale than other types of projects, the use of subcontractors is less prevalent. It’s not uncommon to have subs on these projects, and if you are one of them, you must be careful since you won’t have lien rights.