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Besides a mechanics lein what else can I do?

ArizonaPay When Paid

I am a contractor. Due to some delays with doors and windows with Covid, home owners are demanding I pay them around $3500 for their inconvenience. I offered $1200.00 as a peace offering and they refused that amount and now are not giving us our progress payment of around $19k+ that is past due. Can i do a mechanics lien? Can I sue? Can I terminate contract? How can I get the money that is due to us?

3 replies

Jun 28, 2021

Generally, a property owner is required to pay a contractor for the labor and materials incorporated into their property promptly. Arizona has a prompt pay act that protects contractors and places an affirmative duty on the property owner to pay them timely. There are exceptions to the prompt pay requirements where work is disputed as to quality or completion, but an owner may only withhold an amount equivalent to the amount needed to cover those disputed issues. If a contractor entitled to payment presents the owner with an invoice, the owner must provide an itemized list of disputed items and the amount withheld for those items within 14 days. If there is no dispute, the invoice must be paid in 21 days. the homeowner's failure to make timely payment creates a separate cause of action from breach of contract.

Additionally, if a property owner is refusing to pay you for the labor and materials that you have already incorporated into the proeprty, you can proceed with filing a mechanics lien even if the job isn't complete, provided that you have met all of the prerequisite requirements to filing a lien.

In addition to recording the lien, once it is served on the property owner you can also move forward with foreclosing the lien through a lawsuit. Your lawsuit should contain a count for lien foreclosure and additional counts for prompt pay violations, breach of contract and unjust enrichment.  

As an additional remedy, you may be entitled to cancel the contract, provided the terms of the contract allow for cancellation under the circumstances. You should consult with an attorney before deciding on your legal course of action.

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Jun 29, 2021

Hey Scott,

Thanks for your knowledge and insight around this. I have been in business for over 15yrs and we've never had to deal with this issue. Given the state of the current situation we are going to seek an attorney. Any recommendations in the Phoenix metro area? 

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Jun 29, 2021

We handle these types of cases and claims at Arizona Property Law. My contact info is linked in my bio. 

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