Arizona Mechanics Lien Frequently Asked Questions
It’s easy to file Arizona mechanics liens with zlien, the web’s leading all-in-one mechanics lien compliance manager and security platform. Plus, zlien’s platform can help you prepare and file mechanics lien cancellations, preliminary notices, and more. To learn more about Arizona’s mechanics lien law, read the frequently asked questions below.
Frequently Asked Questions
- Arizona Mechanics Lien FAQs
- Who can file a Arizona Mechanics Lien?
- When is the Deadline to File a Arizona Mechanics Lien?
- Do I Need to Send Notice the Lien Was Recorded?
- Can I Include Attorney’s Fees, Collection Costs, or Other Amounts in the Lien Total?
- When is the Deadline to Enforce a Arizona Mechanics Lien, or, How Long is My Lien Effective?
- Will My Arizona Lien Have Priority Over Pre-existing Mortgages or Construction Loans?
- Must the Arizona Lien Include a Legal Property Description?
- Must the Arizona Lien Include be Notarized?
- Can I File a Arizona Lien if I’m Unlicensed?
- Can I File a Arizona Lien on a Condominium Project?
- Who Cancels the Arizona Lien if/when I get Paid?
- Are there lien rights when work initiated by a tenant?
- What Are the Lien Waiver Rules?
- How are Pay If Paid and Pay When Paid Clauses Interpreted in Arizona?
- Can I Electronically Record An Arizona Mechanics Lien?
- Arizona Preliminary Notice FAQs
Arizona Mechanics Lien FAQs
Who can file a Arizona Mechanics Lien?
You are qualified to file a mechanics lien in Arizona if you furnished labor, materials, professional services, fixtures, or tools, in the construction, alteration, repair, or improvement of any building, or other structure pursuant to a contract with the owner, or with an agent of the owner. Design professionals are protected by Arizona’s mechanics lien laws provided they have a written contract with the property owner, or a written or oral contract with the architect who has a written contract with the owner. Only parties who have a written contract with an owner-occupant may file a lien against his dwelling. Suppliers to suppliers are not qualified to file a mechanics lien in Arizona.
When is the Deadline to File a Arizona Mechanics Lien?
If a Notice of Completion has been recorded on the project, a mechanics lien must be recorded within 60 days after the Notice of Completion was recorded. Otherwise, a mechanics lien must be recorded within 120 days of completion of the improvement. In Arizona, the time to file a mechanics lien is triggered by the completion of the improvement, not the time an individual lien claimant last provided labor or materials to the project.
Do I Need to Send Notice the Lien Was Recorded?
Yes. Arizona law requires that a lien claimant make duplicate copies of his mechanics lien, record one with the county recorded in the county in which the property is located, and “within a reasonable time thereafter” serve the remaining copy on the property owner, if he can be found within the county. “Serve” in this context means at least registered or certified mail, with the sender obtaining a certificate of mailing, receipt of registration, or receipt of certification. More information here available at this article: When Must An Arizona Mechanics Lien Be Served on the Owner.
Can I Include Attorney’s Fees, Collection Costs, or Other Amounts in the Lien Total?
No. However, if you foreclose on the lien, the court may award the prevailing party the money paid for recording the lien, attorney’s fees, and the necessary expenses incurred by the attorney, as costs. An Arizona appeals court recently ruled upon the availability of attorney fees when enforcing a mechanics lien claim.
When is the Deadline to Enforce a Arizona Mechanics Lien, or, How Long is My Lien Effective?
Arizona law requires that a mechanics lien be enforced within 6 months from the lien’s filing. If this 6-month period passes without an action being filed to enforce the lien, the lien expires. Arizona requires both the filing of the foreclosure action, and, within 5 days of filing suit, the recording of a lis pendens.
Will My Arizona Lien Have Priority Over Pre-existing Mortgages or Construction Loans?
No. An Arizona mechanics lien has priority over liens that attached to the property after the mechanics lien attached. All mechanics liens arising out of a single contract have equal priority. Arizona courts have recently examined the Lien Priority issue in the state, specifically with respect to whether a construction lender can claim priority over any and all liens through the “equitable subrogation doctrine.” The court ruled in favor of the mechanics lien claimants, holding that the lien right trumps a later filed mortgage. We wrote about the case here: Arizona Case Lifts Mechanics Liens Over Mortgages Claiming Rank with Equitable Subrogation Doctrine.
Must the Arizona Lien Include a Legal Property Description?
Yes. A mechanics lien in Arizona must include a legal property description to be valid. See this article: Is A Legal Property Description Required for an Arizona Mechanics Lien?
Must the Arizona Lien Include be Notarized?
Yes. A mechanics lien in Arizona must be notarized to be valid.
Can I File a Arizona Lien if I’m Unlicensed?
No. According to Arizona law, a person who is required to be licensed as a contractor but who does not hold a valid license shall not have lien rights. Also, a person who furnishes professional services but who does not hold a valid certificate of registration shall not have the lien rights. Unlicensed contractors or professionals may find themselves scouring around for a cause of action to get paid for their work. Can they sue under contract? Can they make an unjust enrichment claim? Consider this article about whether an Unjust Enrichment Claim Can Be An Alternative To A Mechanics Lien Claim.
Can I File a Arizona Lien on a Condominium Project?
You may file a lien against an individual condominium in Arizona, provided you are a party otherwise allowed to file a mechanics lien.
Who Cancels the Arizona Lien if/when I get Paid?
Arizona law requires that the lienholder shall release the lien within 20 days after satisfaction, or within 20 days of the owner-occupant’s written request if the lien was incorrectly filed against the dwelling of an owner occupant. Failure to grant the release subjects the lienholder to personal liability of $1000 and liability for actual damages.
Are there lien rights when work initiated by a tenant?
Maybe. A mechanics lien may be enforced against a property owner for work requested by a tenant if the tenant acted as the owner’s agent. In DeVry Brick Co. v. Mordka, 96 Ariz. 70, 71, 391 P.2d 925, 926 (1964), the Arizona Supreme Court addressed whether such an agency relationship existed when a lease term required the tenants to make extensive improvements to the leased premises pursuant to plans approved by both owner and tenants, holding that it did “create an agency relation between the lessors and the lessees for the purposes of the lien laws.” In a 2012 case, an Arizona court held that property owners cannot “contract around” lien exposure when tenant improvements are performed and the tenant acted as the “owner’s agent.”
Even if the tenant is not the owner’s agent, there may still be hope, as claimants may file a mechanics lien against the tenant’s leasehold interest in the property. A more recent case addressed lien claims against tenant improvements, even when the landlord / tenant relationship was terminated. Read about that here: Arizona Mechanics Lien Against Terminated Leasehold Interest May Still Have Purpose.
What Are the Lien Waiver Rules?
Arizona statutorily mandates that all parties on a construction project use certain legislatively designed construction lien waiver forms. This state is one of only 11 states that requires this. If a contractor or owner asks you to use a lien waiver form that does not conform to the statutory form, the waiver will be invalid, and the contractor could get in legal trouble. See this article: The 11 States with Statutory Lien Waiver Forms. Also, Arizona state law prohibits contractors and suppliers from waiving their right to file a mechanics lien in contract. You can learn more about the prohibition of such “no lien clauses” at this article: Where Can You Waive Your Lien Rights Before Payment?
How are Pay If Paid and Pay When Paid Clauses Interpreted in Arizona?
Generally speaking, Arizona courts have an unfavorable view towards contingent payment clauses, such as pay when paid and pay if paid provisions in a construction contract. The burden to enforce these provisions falls on the party trying to enforce it, such that the provision will have to meet all the requirements for these to pass court tests that they are fair and clear. We wrote about how these clauses are specifically interpreted by the Arizona courts in “Pay When Paid: Arizona,” where it was said that “In order for a pay when paid clause to be enforceable to shift the risk of owner non-payment, the clause must be very carefully written, and must clearly and plainly state that the subcontractor agrees to be paid only from a specific fund, and that, if that fund is not created or does not receive sufficient funds, he will not be paid for all or some of his work.”
Can I Electronically Record An Arizona Mechanics Lien?
The answer here depends on the county and the technology adopted by that county. Arizona has passed a state law empowering recording offices to record land records, such as mechanic lien claims, electronically. The state’s biggest county, Maricopa County, does accept mechanics lien claim filings electronically. zlien’s platform enables companies to electronically record mechanic lien claims in states where e-recording is available, and in those that are not, the platform still enables companies to get the lien recorded.
Arizona Preliminary Notice FAQs
Do I need to send a Arizona Preliminary Notice?
Yes. Arizona law requires that a Preliminary 20-day Notice be sent by every person who furnishes labor, professional services, or materials for which a lien may be claimed as a necessary prerequisite for the validity of the lien rights. The failure to provide a Preliminary 20-day Notice is fatal to a mechanics lien in Arizona. A lien claimant who underestimates the labor and/or materials he will provide to the project is protected up to 120% of the amount contained in the original notice.
We’re written a great deal about Arizona’s preliminary notice requirements. Read those articles here:
- Arizona Preliminary Notices – The Basics
- Send Your Arizona Preliminary Notice on Every Job
- Should I Wait To Send My Preliminary Notice?
- What If Owner Refuses to Claim Preliminary Notice Mailing in Arizona?
- Recent Case Makes Little Points about Arizona’s Preliminary Notice Requirement
- Everyone Must Send Preliminary Notice in Arizona
- Arizona’s 20% Preliminary Notice Rule
When do I need to send a Arizona Preliminary Notice?
The notice must be given no later than 20 days after the claimant has first furnished labor or materials to fully protect the lien claimant. A lien claimant who failed to provide a 20-day notice within 20 days of first providing labor or materials may provide the notice at a later date, but will only retain lien rights for materials and/or labor furnished within the 20 days preceding the late notice, and the labor and/or materials provided thereafter.
What if I send the Arizona Preliminary Notice Late?
How Should the Arizona Preliminary Notice be Sent?
Do I have to send the Arizona Preliminary Notice to Someone Other than the Owner?
Yes. In Arizona, the Preliminary 20-day Notice must be given to the owner, the general contractor, the construction lender (if any), and the party with whom you have contracted.
Is the Arizona Preliminary Notice Considered Delivered When Sent or When Received?
The requirement to send a preliminary notice is fulfilled upon mailing. This is made clear by ARS § 33-992.01(F) which provides that “service is complete at the time of the deposit of notice in the mail.” Further, courts have held that “actual receipt” of the notice is not even required. So long as the notice is mailed to the right place in the right way, the potential claimant has satisfied its obligations. (Case is Columbia Group v. Jackson). See blog article: What If Owner Refuses To Accept Preliminary Notice Mailing in Arizona?