Arizona, much like other states around the country, requires preliminary notices to be sent in order to secure lien rights. Helpfully, although the Arizona mechanic’s lien statute is long and complex just like any other state, good information is provided regarding the notice form.
This post is designed to give you a quick overview of the Arizona notice requirements for parties involved in private construction projects.
Arizona Preliminary Notice Requirements
For the preliminary Arizona notice, the Legislature has embedded an actual form template into the statute. This makes for less errors when contractors need to prepare notices in-house, just lift the wording from the statute and send. It does, however, require the potential lien claimant to be familiar enough with researching law that looking through the statute to find the notice template is not a problem. Also, the potential lien claimant must still know and meet the timing requirements.
As for the timing aspect, the Arizona notice is a twenty (20) day preliminary notice. This means that the notice must be delivered to the owner, prime contractor, and construction lender within twenty days of first supplying labor or materials to the project.
Typically the notice can be delivered later but it will not secure lien rights for anything further than twenty days before delivery.
Best practice rule-of-thumb here is to file the preliminary notice on every Arizona project soon after supplying labor and/or materials to the project.
Arizona Notice of Intent to Lien Requirements
The Arizona notice rules do not require a notice of intent to lien be filed before filing a lien or at any other time during the lien process. This does not mean that a company performing work in Arizona should not send one, however.
As said many times before in this blog, its always a best practice to send a notice of intent to lien. This document is very similar to a demand letter. It notifies all relevant parties that your company will file a lien unless it gets paid within ten days of receipt of the notice, and is often useful in facilitating payment.
Other Arizona Notice, Stop Notice
Another handy Arizona notice that can be sent is called a stop notice. The statues governing stop notices are hidden down in § 33-1004(C) under the bond claims. A stop notice may be sent when a project has a bond, as long as the rules governing the sending of stop notices are followed.
An Arizona stop notice on a bond is good because it requires the surety or bonding company to hold the money being requested in the stop notice. From there it will turn into an insurance claim, whereby the claimant will have to prove its owed the money being held by the bonding company.