How to File a Mechanics Lien in Arizona. Serving the Pre-Lien Notice.
Filing a mechanic’s lien in the recorder’s office in Arizona after you have completed the project is something of which we have general knowledge. How to file mechanic’s lien in Arizona is simply based upon unpaid services at the end of the project. But there seems to be some confusion as to whether you are required to serve a pre-lien notice before recording that mechanics lien. That confusion has to do with who you have your contract with on the project. Let us examine the basic principles.
First, what is the purpose of a pre-lien notice?. When an owner has a direct contract with the prime, he has full knowledge of who he or she is dealing with because of that direct relationship. Not so with subs and suppliers. In many cases, the owner has no knowledge of them and their potential mechanics lien claims. For this reason, a pre-lien notice acts as an identification notice of who they are. This will then give the owner the ability to demand lien waivers upon progress draws so as to make sure no mechanics liens are filed on the property.
For this reason, many prime contractors mistakenly believe they are not required to serve the pre-lien in Arizona. The confusion is exemplified by the fact that neighbor California does not require such a notice.
For this reason, Arizona is in the minority and is one of the states that requires everyone, whether a design professional, general contractor, subcontractor, or supplier to serve that pre-lien notice. Unfortunately, it is mandatory by statute and a condition precedent to ultimately recording a mechanic’s lien. In other words, without the notice, you are not entitled to record the mechanic’s lien period—even if there is clear evidence of not being paid!
That notice must be served certified mail on the owner and general (if you are a sub or supplier) no later than twenty days after the lien claimant has first furnished labor, services, materials, machinery, fixtures, or tools to the project. Remember, you can serve the notice as early as you wish, even before starting the work. In fact, it is recommended you send off the notices soon as the “ink is still wet” on your purchase order or contract. That way you will not forget.
But all is not lost if you serve late. You can still file your mechanic’s lien for unpaid services performed within twenty days of serving your twenty day notice and everything in the future.
And another word of advice. Some people hold off on the notice for smaller jobs or when dealing with contractors of which you had previous dealings. Don’t do this. It would just be your luck that on these projects you end up being unpaid and unable to enforce a mechanic’s lien.
So remember, how to file mechanic’s lien in Arizona does have some tricky parts. Gives us a call if there are any questions.