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Does an early termination without cause affect lien deadlines?

ArizonaConstruction ContractLien DeadlinesNotice of TerminationPay ApplicationsPreliminary NoticeRight to LienSlow Payment

I am a subcontractor working on a commercial project. My GC and I had a personal dispute, (the GC failed to pay me for 5 months on an unrelated job for the State of Arizona, and my "letter of intent to lien" gave notice to all interested parties of their failure to pay their subcontractor- this resulted in d the GC will no longer be hired for any future projects for the State of Arizona) therefore, in turn, the GC retaliated for my request for payment by terminating the remainder of all contracts with me in progress, (all unrelated) as well as any future contracts. However, there have been two payment applications already submitted for completed work. What are my lien deadlines, and are they affected by the early termination of our contract without cause?

1 reply

Apr 14, 2023

Is this a project for the government or a private project? You note that the GC can no longer do projects for the State of Arizona so that brings up this question. This matters. 

Your post then brings up secondary questions. You say the GC terminated your other contracts. Do those contracts allow unilateral termination on notice and without cause by the GC? As for future contracts, the same point is at issue. A contract is enforceable on acceptance and cannot be terminated unless the contract allows that right. If all these contracts allowed the GC to terminate, that was an unfortunate contract term to accept. Have your attorney closely review your contracts. 

With that out of the way, to your question. If this is a private contract, contractors are required to record their notice and claim for lien within the earlier of 120 days after completion or, if a notice of completion has been recorded and served, within 60 days after such recording. ARS § 33-993(A). 

 Completion means the earliest of either 30 days after final inspection and written final acceptance by the governmental body issuing the building permit, or cessation of labor for a period of 60 consecutive days, except when such cessation is due to a strike, shortage of materials, or act of God. ARS § 33-993(C). If your contract was terminated, then this is a cessation of labor. 

Assuming you timely served preliminary notice, make sure to timely file the lien. If you don't have a construction attorney, reach out to a construction attorney for advice. Our office provides free initial consultations

Robert Murillo

robert@pivotallegal.com. 

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