Filing a construction lien can be complicated. There are many pieces to a lien including detailed paperwork and following strict requirements. It is always best to talk with a construction attorney before moving forward to understand the entire process and know your options.
What is a Construction Lien?
A construction lien is a claim made against a property and is usually made by a contractor or subcontractor who worked on the property. They file a construction lien when they have yet to receive payment. The laws surrounding these liens differ from state to state.
Who can file a lien?
Contractors, subcontractors, suppliers, architects, engineers, surveyors and other service providers are able to file a construction lien if they have not received payment for a residential or commercial property. The best way to prevent a lien from being filed against you is to simply pay the invoice on time. Keep in mind that only licensed contractors and workers are allowed to file a lien.
Requirements for filing a lien
First, there must always be a valid and working contract between the two parties. This contract must be detailed and thorough including important details such as the estimate of costs. If a detailed contract is not inplace, it is going to make filing a lien much more difficult. Most states require a lien notification and have specific laws surrounding construction liens. Also, all liens must be notarized.
Arizona Lien Laws
In the state of Arizona, a 20 day preliminary notice is mandatory for all filed liens. Under Arizona law, the notice must include the contract’s estimated amount. A notice is sent by the contractor or supplier of a construction project to establish the right to file a lien. If the bill is paid after the notice and before the lien is filed, no further action is needed. Some counties in Arizona, like Maricopa County, does accept liens to be filed electronically.
There are a couple of deadline options when it comes to construction liens in Arizona. A notice of completion is a document that is filed after the completion of a construction project to shorten the filing deadline for a lien. The document must be signed by all parties involved and must be complete with specific detail, these details include the amount of money owed and any deadlines. A Notice of Completion needs to be served to all claimants within 15 days of filing. If a notice of completion has been filed, the deadline to pay off the bill is 60 days from the date of when the notice of completion was filed. If a notice of completion has not been filed, the deadline is 120 days from the completion of the project.
To enforce a lien, which usually means foreclosing the property, it must be done within 6 months from the date recorded on the lien. If this is not, then the lien expires. To initiate enforcement of the lien, a Lis Pendens notice must be recorded within 5 days of filing. Defined by the Arizona Association of Realtors, a Lis Pendens is a document that is recorded with the county recorder. This notifies the public of a certain property that is subject to litigation, which might affect ownership of the property.
Requirements for filing a lien in Arizona
There are some requirements when it comes to filing a lien in Arizona. Similar to most other states, a written contract that includes full details of the construction project must be signed by all parties to file a lien.
Benefits of Working with a Construction Attorney
Since construction liens can be confusing, a construction attorney can help you with the process. MKC Law Firm offers legal advice and are known as the lien experts. We can help you with recording, perfecting and enforcing liens. As your attorney, we can secure all documents that go along with a lien, such as preliminary notice requirements, timetables, stop work notices and lien foreclosures. The attorneys at MKC Law Firm proudly represent clients in the Arizona construction industry. We offer legal and practical advice while helping you navigate through the process of a lien. In addition to construction liens, our experienced construction law team also handle all complex issues regarding construction projects including drafting and reviewing contracts.
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