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What Exactly is a Lien?



What Exactly is a Lien

You may have heard the term before, a construction lien. But when you are unfamiliar with this, filing for one can be complicated. Before diving into the process, speak with an experienced Arizona Construction Attorney to help you.

The Basics

Let’s start with the basics. First, what exactly is a construction lien? This is a claim made against a property, usually by a contractor, subcontractor or other professionals who worked on the property, that has yet to receive payment. Just like with most things, the laws surrounding these liens differ from state to state.

Arizona Lien Laws

In Arizona, a 20-day preliminary notice on all liens being filed is mandatory. Under Arizona law, the notice must include the contract’s estimated amount that they are seeking. Most liens filed are protected up to 120 percent of the estimated amount listed. 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.

When it comes to deadlines, a notice of completion needs to be filed and is a document that is filed after the completion of a construction project to shorten the filing deadline for a lien. This must be signed by all parties involved and 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 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 as a whole.

In the state of Arizona, to enforce a lien, it must be done within 6 months from the date recorded on the lien. If this is not done, then the lien expires. To initiate enforcement of the lien, a Lis Pendens notice must be recorded within 5 days of filing. This is a document that is recorded with the county recorder that notifies the public of a certain property that is subject to litigation that might affect ownership of the property.

Other Lien Requirements

To file a successful lien, it must be done by a contractor, subcontractor, suppliers of materials, architects, engineers, surveyors and other professionals who provided services to residential or commercial property and didn’t receive payment.

Also, there must always be a valid and working contracting between the two parties involved. Most states require a lien notification and also have other certain laws surrounding construction liens. In Arizona, a written contract that includes full details of the construction project including an estimate must be signed by all parties to file a lien. Also, any suppliers of suppliers to the project are not entitled to filing a lien.

Working with a Construction Attorney

The lien experts at Murphy Cordier PLC can provide you with the legal advice and guidance needed to successfully file a lien. The team can help you with recording, perfecting and enforcing liens. They will be responsible for receiving all documents that go along with a lien like preliminary notice requirements, timetables, stop work notices, and lien foreclosures.

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