Arizona Preliminary Notice Rules at a Glance
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Preliminary Notices Are Required
Arizona law requires that a preliminary “20-day” notice be sent by every person who furnishes labor, professional services, or materials to a project as a mandatory prerequisite to filing a valid mechanics lien.
GCs Must Send Notice
Arizona 20-day Preliminary Notice must be delivered to owner and construction lender within 20 days of providing labor, services or materials.
Subcontractors Must Send Notice
Arizona 20-day Preliminary Notice must be delivered to owner, prime contractor, construction lender, and the party with whom you have contracted within 20 days of providing labor, services or materials. A person performing actual labor for wages is not required to serve notice.
Suppliers Must Send Notice
Arizona 20-day Preliminary Notice must be delivered to owner, prime contractor, construction lender, and the party with whom you have contracted within 20 days of providing labor, services or materials.
You Can Send Notices Late
Arizona allows late notices. The 20 day notice can be sent late and still be effective to preserve lien rights, but its effectiveness starts only 20 days before the notice was sent. In other words, lien rights are only preserved for work/materials provided in the preceding 20 days.
Send Notices to Owner, GC, Lender & Hiring Party
In Arizona, the 20 day preliminary notice must be sent to the general contractor, the property owner, the construction lender, and the party who hired the party giving notice (if not one of the parties otherwise required to receive the notice).
Preliminary Notices Are Required
Public jobs (i.e. city, state, municipal government) in Arizona require preliminary notices be sent at the start of the project.
No Notice Required from GCs
On public jobs, claims for non-payment are generally made against the general contractor's payment bond. Since GCs will not make a claim against their own bond for non-payment, they do not have bond claim rights, and have no preliminary notice requirement.
Subs Must Send Notice
1st-tier subcontractors do not have a technical preliminary notice requirement, and can proceed directly with making a bond claim, although it is best practice to provide notice. All other subcontractors must send preliminary 20-Day notices to the prime contractor. It's usually good practice to send to the public entity commissioning the work and the surety, if known. The notice must be sent within 20 days of first providing materials or labor.
Suppliers Must Send Notice
Suppliers must send preliminary 20-Day notices in Arizona to the, public entity prime contractor. It's usually good practice to send to the public entity commissioning the work and the surety, if known. The notice must be sent within 20 days of first providing materials or labor.
Notices Can Be Sent Late
Arizona allows late notices on public projects. If sent late, a prelim notice on a public job is effective for all the work or materials furnished by the contractor/supplier starting from 20 days before the notice was sent.
Send Notices To GC (Best Practice to Public Entity and Surety, as well)
Preliminary notices on public jobs in Arizona must be sent to the general/prime contractor, ARS 34-223(A). However, it is a good idea to also send the notice to the public entity and the surety, especially as some bonds require the surety to be informed.
For all jobs begun on and after December 31, 2019 – the revised notice must only be sent if the price exceeds 30% of what’s on the notice. More on that here:Arizona’s 20% Rule Changes to 30% starting in December 2019.
Arizona law requires that a preliminary “20-day” notice be sent by every person who furnishes labor, professional services, or materials to a project as a mandatory prerequisite to filing a valid mechanics lien. This requirement is strict, and the only exception is that wage laborers (employees of construction participants) are not required to provide the 20-day notice. Read our Ultimate Guide to Arizona’s 20 Day Preliminary Notice for step-by-step guidance on how to send your Arizona notice.
In Arizona, there is no exception for “direct” contractors. Even parties that contract directly with the property owner are required to deliver a preliminary 20-day notice to the property owner, as well as to the construction lender, if any. In fact, it appears that the statute technically requires a direct contractor to send a preliminary notice to him/herself! The direct contractor prelim requirement is different than the law in many states, which treat preliminary notices as tools to identify sub-tier participants to the owner, as the owner would otherwise not know who may have potential rights against the property.
Just like California’s preliminary notice requirements, in order to fully protect a noticing party’s lien rights the notice must be provided within 20 days of the noticing party’s first furnishing of labor or material to the project.
If that deadline is missed, not all is necessarily lost. An Arizona preliminary notice can be given at anytime, but if it is provided more than 20 days from first furnishing it only protects the amount s due for labor or materials furnished beginning 20 days prior to the date on which the notice was given. A complete failure to provide preliminary notice to the owner, prime contractor and construction lender is fatal to a mechanic’s lien in Arizona.
Additionally, while some states have exceptions to notice requirements provided the owner (or other applicable parties) had actual knowledge of a party’s involvement on the project, or had a deep enough connection to the project that they “should have” had actual knowledge, Arizona does not. In Arizona, the only notice that matters is formal notice.
Arizona’s preliminary notice requirements have both rare, and completely unique aspects. A relatively rare requirement for Arizona preliminary notices is that the notice must contain an estimated total contract amount. This is a specific statutory requirement, but some participants refuse to include that required information on their notices, as it could expose the GC’s mark-up to the property owner, and (presumably) cause friction in the relationship between the sub and the GC.
A unique aspect of the Arizona preliminary notice scheme is that an additional notice can be required later. Generally, states that require notices can be divided into states with a discrete notice requirement (the vast majority) and states that require recurring notices, generally monthly (few). Arizona, however, doesn’t fit into one of those boxes.
For jobs started before December 31, 2019 – if the value of the labor or materials provided to the project exceeds 120% of the previously noticed amount, additional notice is required. This requirement is set forth by ARS §33-992.01(G) and (H), and is a unique aspect of Arizona law.
One other unique aspect to Arizona’s preliminary notice law is that the notice itself must contain an acknowledgment of receipt for the receiving party to sign and return, which proves compliance with the notice requirements.