In the construction industry, there are very few things that are worse than a customer that won’t pay you the money you’ve earned.
Well, come to think of it, there’s at least one thing that’s worse: you have a customer that won’t pay, and when you go to file a mechanics lien, you discover that you don’t actually have lien rights. D’oh!
Unfortunately, not every project participant has lien rights across the board on every job in every state. For this article, we wanted to take a closer look at private construction projects based in the great state of Arizona. Specifically, we wanted to answer the question of who has and who does not have the right to get paid on Arizona construction projects?
Who Has Rights in Arizona?
The lien law in Arizona is fairly broad when it comes to recognizing who has lien rights in that nearly everyone who “furnishes” on a private construction project is protected. As far as what qualifies for “furnishing,” this includes “labor, materials, professional services, fixtures, or tools, in the construction, alteration, repair, or improvement of any building, or other structure.”
You don’t even need to have a written contract to qualify for lien rights in Arizona, though the project itself must originate from a contract that includes the owner or an agent of the owner as a party. Typically, the other party to this contract would be the general or prime contractor.
Who Does Not Have Rights in Arizona?
There are 3 main rules that limit who has lien rights on private construction projects in Arizona.
1. Design Professionals
In order to file a lien, a design professional (architect, engineer, etc) must have either a written contract with the owner, or, a written or an oral contract with an architect who has a written contract with the owner. Therefore, some form of a contract (or contracts) must be present, otherwise, a design professional does not have lien rights.
2. Owner-Occupied Residential Projects
For this type of project, you must have a written contract with the owner in order to file a mechanics lien in Arizona. This rule runs contrary to most other states that tend to allow oral contracts. So if you’re on a owner-occupied residential project in Arizona, make sure you get it in writing!
3. Suppliers to Suppliers
Sorry to say, but in Arizona, suppliers to suppliers can’t file a mechanics lien on any project at all, period. This is actually a fairly common rule that exists in many other states.
Additional Reading:
Arizona 20 Day Preliminary Notice: The Why, Who, What, When, and How
Free Resource
We’ve got a great guide that’s essential reading for anyone in the construction business in Arizona. Our Arizona Mechanics Lien Guide has everything you’ll need to file a valid lien in Arizona, including:
- Information about requirements and rules specific to Arizona
- How to make sure your lien contains the required information
- How to file a lien in Arizona
- How to serve a lien in Arizona
To download your copy (it’s free, by the way) simply click on the button below.
