Arizona Lien Waivers Guide and FAQs

Yes. Everyone exchanging money on a construction job in Arizona must use the same lien waiver forms. These are the forms prescribed by the Arizona lien waiver laws. Arizona is one of 12 states that provide a specific lien waiver form to be used by contractors and suppliers on projects in the state.

Arizona provides 4 different lien waiver forms. Each form is used at different times and under different circumstances. Here are guides to the 4 Arizona statutory lien waivers:

• Conditional Progress Lien Waivers
• Unconditional Progress Lien Waivers
• Conditional Final Lien Waivers
• Unconditional Final Lien Waivers

That depends. And actually, this is a pretty complicated legal question. We wrote a plain English explanation of this in Unconditional Lien Waivers vs Conditional Lien Waivers and the Construction Payment Catch 22. 

Generally speaking:

• Conditional statutory waivers will become binding once there is evidence of payment.
• Unconditional waivers are binding once they are signed by the lienor.

Be careful when signing unconditional lien waivers!

In Arizona, the answer is no. Arizona’s lien waiver laws specifically prohibit contract provisions that waive lien rights prior to performing work. 

At Levelset, we like to call these “no-lien clauses,” and we’ve written about them extensively.  Basically, a “no lien clause” is a clause put into a construction contract requiring contractors or suppliers to waive their lien rights on the job. 

Even though these clauses are illegal in Arizona and in most states, it is a surprisingly common practice.

Many property developers and general contractors think they can put a provision in the construction contract to prohibit subcontractors and suppliers from filing a lien on the job. Many also confuse these “no lien clause” provisions with a common construction contract provision that requires a party “to keep a property free and clear of liens.” These are not the same thing.

The “no lien clause” is asking someone to give up their own lien rights. The “free and clear of liens” clause simply requires someone to handle a mechanics lien filing if one is made on the job (i.e. by paying it, bonding it off, etc.).

In any event, contractors, subcontractors, and suppliers are incapable of waiving their lien rights before starting work on the job. Even if they sign a contract saying they waive their lien rights, in Arizona, this will be illegal and unenforceable.

Maybe. It may be possible to waive lien rights in Arizona after work has started, but before payment is made.  

This question is common because of the unconditional lien waiver form. Construction lenders, property developers, and general contractors commonly seek unconditional lien waivers before payment is made. The question here is whether signing such an unconditional form before receiving payment would actually result in an effective waiving of lien rights.

In some states, the laws specifically provide that this would not be effective. However, Arizona is not one of those states. There is no specific statutory prohibition providing a lien waiver in advance of payment.

In Arizona, therefore, it may be possible to waive lien rights with an unconditional lien waiver before payment. But a lot of things would have to be right, such as:

• The waiver form must follow the legal requirements;
• The waiver language shouldn’t say untrue things, like “We’ve received $__”

It’s also possible to waive lien rights even when you don’t intend to waive lien rights. We wrote about an example of this in Arizona Lien Waiver Through Date: Mistakes Can Result In Lost Lien Rights, calling the “through date” field the most important part of an Arizona lien waiver.  A little mistake with this field, and a contractor may wind up waiving their lien rights without intending it…and maybe even before payment.

In one case, an Arizona contractor who signed an unconditional waiver was actually required to pay back the nearly $200K they received after the GC went bankrupt. Because unconditional lien waivers are not always necessary in Arizona, especially on smaller projects, it’s critical to understand how the law affects your rights before signing an unconditional waiver.

No, Arizona lien waivers do not need to be notarized, even though it’s common for contractors to ask for notarized waivers. In fact, it’s possible that notarizing your Arizona lien waiver could invalidate it since it would alter the statutory form. Accordingly, it’s best practice NOT to notarize an Arizona lien waiver.

That depends. The statutory progress payment waivers include a section that states that the waiver and release, “does not cover any retention, pending modifications, and changes or items furnished after” the “through date.”

The final payment form provides a less comprehensive section which covers all labor and materials “except for disputed claims in the amount of [$__].”