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Are subcontractors able to file a lien on an owner-occupied residential project in Arizona, assuming preliminary notices were sent in a timely fashion?

ArizonaMechanics LienPayment DisputesRecovery Options

I have read from multiple sources that for Arizona owner-occupied residential projects, "Only parties who have a written contract with the owner-occupant may file a lien against an owner-occupied residential project.". Does this mean that a subcontractor who is only in contract with the prime contractor does not have lien rights? If so, what alternative recourse does the subcontractor have to recuperate funds owed?

1 reply

Mar 23, 2018
In Arizona, unfortunately, only those claimants who have contracted directly with a property owner are entitled to file a mechanics lien on an owner-occupied residential property. Of course, this is limited to one a one-family or two family residential property. If a party has provided work to such a property but was hired by someone other than the property owner - such as a general contractor or another contractor - that party will not have the right to file a mechanics lien. However, there are many other options for recovery other than filing a lien.

One option might be to send a Notice of Intent to Lien to the general contractor and the property owner. While the right to file a lien might not exist on such a project, the mere threat of lien may be enough to encourage an owner and/or a GC to make sure payments are properly made.

Another option will be to send a demand letter to a nonpaying party. Regardless of whether a lien is an available option, legal action based on the debt will be an option. Sending a demand letter through an attorney often speeds up payment without actually having to institute legal action.

Finally, another option will be to take legal action either through litigation or small claims court. Granted, litigation can be risky and expensive, and small claims court is a bit unpredictable. Ultimately, the best way to determine the available options will be to consult a local construction attorney - plus, they'll be able to advise you on which path to take.
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