Things to Know About Arizona Mechanics Liens
Arizona’s mechanics lien laws provide substantial protection for contractors and suppliers. However, there are many requirements that must be followed in order for a construction participant to qualify for, maintain, perfect, and enforce lien rights. This page provides frequently asked questions about Arizona’s mechanics lien laws and rules, the lien statutes, and a breakdown of the lien and notice details for contractors and suppliers in Arizona.
You may want to consult our Step-by-Step Guide on How to File an Arizona Mechanics Lien.
Who can file an Arizona mechanics lien
In. the state of Arizona, mechanics lien protection is fairly broad and extends to “every person who labors or furnishes professional services, materials, machinery, fixtures, or tools in the construction, alteration, or repair of any building, or other structure or improvement.” This includes most construction project participants down to the those who were hired by 1st-tier subs. Suppliers to suppliers don’t have lien rights.
There are some exceptions, however. If the project is an owner-occupied, residential project, you must have a written contract with the owner-occupant. Design professionals will also be able to file a mechanics lien if they have a written contract with the owner or any type of contract with someone hired directly by the owner. Lastly, the claimant must be licensed if the work being performed requires one.
How to protect your lien rights in Arizona
Everyone working on a construction project who wants to protect their lien rights must send an Arizona 20-day preliminary notice. This notice must be sent within 20 days of first furnishing labor or materials to the project. Sending this notice late is still effective, but will only cover labor or materials for the 20 days prior to when the notice is served, and the remainder of the project.
Another interesting requirement for Arizona preliminary notices is that while the general rule is that only one preliminary notice is required to be sent (unlike states like Texas in which monthly notices are required) an additional notice can be required if the value of the labor or material furnished to the project exceeds the amount listed in the original notice by more than 20%.
- For projects that started on and after December 31, 2019 – that revised notice must only be sent if the price exceeds 30% of what’s on the original notice. Further discussion here: Arizona’s 20% Rule Changes to 30% starting in December 2019.
Steps to file an Arizona mechanics lien
In general, there are 3 steps to file a mechanics lien claim in Arizona:
Step 1. Complete a mechanics lien form that meets the legal requirements
Step 2. File the lien claim with the county prothonotary (clerk) by the deadline
- The deadline to file a mechanics lien in Arizona is 120 days after completion of the entire project. If, however, a Notice of Completion (NOC) has been filed on the project, the deadline is cut to just 60 days after the NOC was filed.
Step 3. Serve a copy of the lien on the property owner
- A lien claimant must serve a copy of the filed lien claim on the property owner within a reasonable time.
Information to include in your Arizona lien form
To properly file an Arizona mechanics lien, the claim must include all of the statutorily required information. This includes:
- Legal property description
- Owner’s information
- Hiring party’s information
- Lien amount
- Attached copy of the contract (or statement of contract terms)
- Project completion date
- Date preliminary notice was sent
Releasing an Arizona lien claim
If you’ve been paid, the lienholder is required to release the lien within 20 days after satisfaction. Also, if a lien is invalidly filed on an owner-occupied residential property, the lien must be released within 20 days of receiving a written demand to do so. Failure to release within these timeframes can make the claimant liable for $1K and actual damages.
Enforcing an Arizona lien claim
If you have not been paid, an Arizona mechanics lien must be enforced through a lien foreclosure action within 6 months after the lien was filed. If no action is taken within 6 months, then the lien claim will expire, and no longer be enforceable. Once an action has been filed, the claimant must also record a Lis Pendens in the county clerk’s office within 5 days of filing.