How should I go about filing a lien with multiple contracts/preliens?

5 months ago

We’re in a bit of a sticky situation! We had 4 contracts total for a large AZ commercial job. We sent a prelien for the 2nd and 3rd contracts, but not the 1st or 4th. Everything that we are owed is for retainage or change orders, but I’m worried that I can’t file a lien for funds I didn’t prelien. Should I have sent updated preliens for the change orders? Can I file a lien without having sent preliens for the total owed?

Additional info about this contractor
Project Role: Subcontractor
Project Type: Commercial
Attorney Jennings, Haug & Cunningham, LLP
38 reviews

Preliminary 20-day notices are not done by contract, they are done by an estimate of the amount of labor, materials, equipment, supplies provided to the project.  The value of the materials actually supplied may not exceed the estimate by more than 20%. If so, you must serve another preliminary 20-day notice increasing the estimate. This notice should be served before exceeding the estimate by more than 20%.

So regardless of what “contracts” were liened, if they were all for work on the same project, then you are limited (for purposes of a mechanic’s lien) to the amount listed in the 20-day notice plus 20%.

 

With respect to not liening the work for the first and four contract, in the event a preliminary 20-day notice is not served within 20 days after having first provided materials, it may be later served. Later service is effective to protect lien rights for the value of the labor, equipment, materials and supplies provided within 20 days before the service of the preliminary 20-day notice and thereafter.  If you are down to retainage, then most of the work was probably done before the last 20 days and a preliminary 20-day notice will not do you any good at this point.

Keep in mind, you are still owed the money for the labor and materials provided to the project under your contract.  It’s just that the amount owed will not be secured by a mechanic’s lien over and above 120% of the value on the preliminary 20-day notice.

Also, as of January 1, 2020, the amount goes up from 20% to 30% of the amount on the preliminary 20-day notice.  So any work done after January 1, 2020 would be subject to that rule.

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