Contractor send a 20 day premliminary notice. He hasn't gave us price yet or hasn't been hired buy us yet. My question is before we start working with this company. I would like for them to not put a lein on the property. What document should I use.
1 reply
Sep 23, 2019
First, keep in mind that a preliminary notice isn't a sign that the project property is being liened. Rather, it's a required notice that is intended to provide a property owner with helpful information about the project being performed on their property. While it's true that an Arizona preliminary notice is required in order to preserve the right to later file a mechanics lien, receipt of a notice is not itself indicative that a lien will be filed. They're designed to be helpful for the property owner, which we discuss further here: The Top 5 Reasons You Should Love to Receive Preliminary Notices
The best day to avoid an Arizona mechanics lien claim is to make sure all payments are made in full and made on time. But, when hiring a contractor, there's no one document that will whole-sale prevent a mechanics lien from being filed. In fact, Arizona law specifically prohibits the ability to force a contractor to waive their lien rights before performing work.
But again - mechanics lien rights will only exist of the contractor or someone else hired to perform work on the job (like a subcontractor, supplier, equipment rental company, etc.) performs work but goes unpaid for their work. So, if everyone on the job actually receives payment, no one will have the right to file a mechanics lien.
Granted, properly utilizing Arizona mechanics lien waivers will go a long way to preventing a mechanics lien. Lien waivers act like receipts for payment - when someone is paid, a lien waiver should generally be requested of them. And, if everyone provides a lien waiver every time they get paid for the work that they've done, an owner can be even more at ease that a lien won't be filed on their property.
For more background on the subject, I think these resources will be valuable:
(1) Arizona Lien Waivers Guide and FAQs(2) The Property Owner’s Guide to Lien Waivers