Disclaimer:
Mechanic's Liens and related issues represent an extremely complex and evolving area of law that cannot be adequately explained in a single page. The information provided below does not constitute legal advice and is not intended to provide all possible information regarding Mechanic's Liens. If you have an issue regarding Mechanic's Liens, you should contact an attorney.
What is a Mechanic's Lien?:
A Mechanic's Lien is a device used to protect the rights and interests of contractors, subcontractors and others who add value to someone else's property. Mechanic's Liens can also serve to protect the interests of the property owner by providing.
Why Are Mechanic's Liens Important?:
Mechanic's Liens provide a framework whereby contractors and others who provide labor and services can obtain security for their work, while at the same time providing the owner notice of possible claims against his property and opportunity to answer those claims in a more predictable and orderly setting.
Who Can File a Mechanic's Lien?:
Arizona statutes provide that a lien may be recorded by "every person who labors or furnishes professional services, materials, machinery, fixtures or tools in the construction, alteration or repair of any building or other structure or improvement" at the direction of the owner or the owner's agent. A.R.S. § 33-981(A). Agent is defined by the statute as "[e]very contractor, subcontractor, architect, builder or other person having charge or control of the construction, alteration or repair, either wholly or in part, of any building, structure or improvement[.]" A.R.S. § 33-981(B).
What the language above means is this, anyone who provides the above and has a direct contractual relationship with the owner, the prime contractor, or any of the prime contractor's subcontractors can file a Mechanic's Lien.
Architects, engineers and surveyors, or other persons who are providers of "professional services," may also record Mechanic's Liens. A.R.S. § 33-1007. However, persons who fall under this category must have an agreement directly with the owner or with an architect who has a direct agreement with an owner.
There are also exceptions to the rule. 1) No Mechanic's Liens may be filed on a public project. 2) Only persons who have executed a contract directly with the owner-occupant of a single one-family or single two-family dwelling may file a lien. 3) No Mechanic's Liens may be filed on private projects which provide a recorded payment bond.
When Can a Lien be Filed?:
Before a Mechanic's Lien may be filed the filing party must give preliminary notice. The preliminary 20-day notice must be given no later than 20 days after the claimant first furnishes labor or materials to the job site. If the notice is given after 20 days, any lien subsequently filed will not cover all labor and materials supplied to the job. For the statutory preliminary 20-day notice form where it must be sent see A.R.S. § 33-992.01.
After the preliminary 20-day notice is properly given, a notice and claim of Mechanic's Lien may be filed at any time prior to 120 days after the "completion," itself a tricky concept, of the project or sometimes no later than 60 days after a notice of completion has been recorded. For the mandatory contents of a notice and claim of lien see A.R.S. § 33-981(A). Copies must also be made and served upon the owner if he can be found within the county where the building structure or improvement is located.
Spurious Claims:
Those intending to file Mechanic's Liens and those against whom liens have been filed should also be aware of the consequences and remedies for filing a baseless claim.
Arizona statutes provide that if a lien is filed and the claimant knows or has reason to know that the document has no merit or contains a misstatement or false claim, the claimant is liable to the owner for the greater of $5,000.00 or treble damages caused to the owner plus reasonable attorney's fees and costs. A.R.S. § 33-420.
