Owner Refuses To Claim Preliminary Notice Mailing

We send a lot of preliminary notices. Naturally, a lot of these certified mailings are returned to us as “unclaimed” or “refused.” One benefit of Levelset’s Preliminary Notice Services is that we help your company manage these deliveries, but clients frequently inquire as to what can be done when an owner, contractor or other party refuses to accept the preliminary notice mailing. This post analyzes an answer to this question under Arizona’s law.

You Can Lead A Horse To Water…

The mechanics lien laws in Arizona (as elsewhere) are designed to balance the interests of property owners with the interests of subcontractors and suppliers furnishing labor and materials to an owner’s property. When these contractors or suppliers go unpaid for furnishing to a project Arizona law allows them to file a mechanics lien. However, to protect the interest of the owner, the law also requires a preliminary notice be sent to the owner (and general contractor) within 20 days of first furnishing anything to the project.

In Arizona, preliminary notice must typically be sent to the required parties by certified mail. When the certified mail envelope arrives at its destination, the recipient is required to sign for it and acknowledge acceptance.

Some owners and general contractors think they can be clever and refuse the mailing. Others are simply too slow to get to the post office and the notice goes unclaimed. Does the law actually require the contract or supplier to force these parties to accept the mailing?  How is that possible?

There are, of course, some practical limitations here.

It would be unfair to potential lien claimants to require them to either (i) force the recipients to accept the mail; or (ii) require them spend some absurd amount of money personally serving an owner or contractor who refused or unclaimed a mailing.  You can lead the horse to water, as they say, but you can’t make him drink, right?

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Arizona Requires You Mail Notice, Not Actual Receipt

ARS § 33-992.01(F) provides as follows:

The notice or notices required by this section may be given by mailing the notice by first class mail sent with a certificate of mailing, registered or certified mail, postage prepaid in all cases, addressed to the person to whom notice is to be given at the person’s residence or business address. Service is complete at the time of the deposit of notice in the mail.  [emphasis mine]

The Arizona Supreme Court addressed the issue in Columbia Group v. Jackson (151 Airz 76) in 1986 by saying:

By its choice in words, the legislature apparently intended for service to be complete “at the time of the deposit” in the mail. Had the legislature intended to required actual receipt of the notice, it could have easily done so…[i]t is the “mailing” and not the “receipt” which is conclusive proof of service for the purposes of [the statute]. Accordingly, the trial court properly found that actual receipt was immaterial in this case.

This case did not involve a situation where the property owner or contractor plainly refused or left a mailing unclaimed. In this case, the general contractor had just argued that he never received the preliminary notice.  The court did not directly address, therefore, whether the potential claimant had any additional obligations to attempt the mailing after the original attempt was refused. In other words, does the potential claimant have any duties to re-send or serve through other means if it knows the original mailing was not sent?

I think that the potential claimants would not have any additional duties, and that the Arizona courts would agree with me.

The reasons are:

  1. The circumstances of a returned or unclaimed mailing does not change the statutory language, and the statutory language is clear: mailing, not delivery is required; and
  2. The claimant should not be punished for the owner refusing or not claiming a mailing. The property owner has the right to notice, but if the owner refuses it or doesn’t claim it, that’s a waiver of that right, or at least a tactic or direct estoppel to the owner to later argue that the claimant didn’t provide notice.

Claimants Have Obligation To Send To The Right Place

An important footnote for this blog post is to remind readers that the obligation to “send” the preliminary notice is only met when you actually send it to the right person at the right place.  Actual delivery is not required, but it’s pretty clear that Arizona courts will not consider the notice mailed unless it is actually addressed to the correct place.  You’ll want to be sure you can prove this, too, as proof of mailing is almost as important as the mailing itself.

The big gray area is when your sending to a particular person or address is in good faith – as is the case sometimes when a party has identified themselves as having an address they do not have or not longer have.  Yes, I’ve actually seen this happen.

What If The Owner Refuses To Claim Preliminary Notice Mailing in Arizona?
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What If The Owner Refuses To Claim Preliminary Notice Mailing in Arizona?
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