Hello, We had a sub-contractor & general complain to us about sending prelim notices to owners on owner occupied dwellings. In this instance the owner purchase the land and are building a home, per Arizona law this is considered an occupied dwelling. The General on the project mentioned that Cemex sending prelims notice to this particular owner is illegal, since you cannot place a lien on an owner occupied dwelling. Are we wasting resources on sending these prelims even thought we don't have any rights? is there anything I could tell the GC/Sub about these prelims. ?
The general is right, provided it is a "Dwelling" as defined 33-1002(A)(1) and the person is an owner-occupant. Owner-occupant is rather specific and depends on more facts than you provided. For example, when a person owns the unimproved property before construction, and has a house constructed on the property, with the intention of living in the house, that person will be an owner-occupant, even if they transfer ownership of the property into a trust prior to moving in. Marco Crane & Rigging Co. v. Masaryk, 341 P.3d 490 (Ariz.App. Div.1, 2014). If that is the case, you must have a written contract with the owner-occupant to have lien rights.
There is no reason to spend time to send prelims provided you are sure the property falls under the exception in the statute. The determination needs to be made each time, not as some blanket policy as it depends on the exact circumstances. As you know, whenever you do have lien rights you must timely follow the procedure to the letter.
Robert,
Thank you very much for the response, I will be sure to let my credit manager know and see what we can do about these specific types of projects. Much appreciated,
My pleasure. If you need assistance on Arizona or Colorado construction matters, feel free to reach out.