The Arizona mechanics’ and materialmen’s lien statutes provide protection to parties who supply labor, professional services, materials, machinery, fixtures or tools for the improvement of real property. The protection takes the form of a mechanics’ lien that attaches directly to the building, structure or improvement enhanced by the liening party’s services, materials or labor. The law is designed to protect workers, contractors and vendors from getting stuck with a large unpaid bill once they have completed a project. While most mechanic’s liens are valid, there are many cases where a contractor or supplier may file a wrongful lien. Here is everything homeowners need to know about Arizona mechanic’s liens and how to handle wrongful liens against their property.
Arizona Mechanics Lien Statute
Arizona Revised Statute 33-981 details the governing laws for mechanic’s liens in the state. The law applies to all labor, professional services, materials, machinery, fixtures and tools used in construction or alteration of a building. Contractors and professional service providers in construction can have significant costs to the materials and labor they provide and the law guarantees they receive payment when they have completed their work. If a customer or client does not pay the invoice in full for their completed services, the contractor or service provider can file a mechanic’s lien against the property.
Here are a few other important points on Arizona mechanic’s liens to understand:
- Property owners are liable for the fair market value of any labor or materials used in the construction, repair, or improvement of their property.
- Contractors must be licensed in order to file a lien against the property.
- Anyone providing professional services must hold a valid certificate of registration in Arizona in order to file a lien against the property.
- Professional service providers must have a contract directly with the property owner or an architect, engineer or contractor that has an existing contract with the owner in order to file a valid mechanic’s lien against the property.
- Anyone looking to successfully file a mechanic’s lien against a property must provide a preliminary 20 day lien notice to the property owner and provide adequate proof of services completed.
Wrongful Liens and Best Remedies
There are many valid reasons why a lien might get filed against your property. These primarily involve non payment for the material or services provided by the contractor or supplier. However, it is common for parties to record wrongful liens against property in Arizona and those situations generally require an experienced real estate attorney to assist in getting the lien removed.
In Arizona, a party who knowingly records a wrongful lien is subject to severe penalties. Under A.R.S. § 33-420, a person purporting to claim an interest in, or lien or encumbrance against real property, who “causes a document to be recorded knowing or having reason to know that the document is groundless is liable for not less than $5,000 or for three times the actual damages caused by the recording, whichever is greater, plus reasonable attorneys’ fees and costs”. In addition, the person is guilty of a Class I misdemeanor. Attorneys’ fees are also recoverable, so it is wise to immediately reach out to a real estate lawyer to make sure the investigation of the lien and removal is handled properly.
Homeowners that are unable to contact the lienholder may need their lawyer to pursue removal of the lien by filing a quiet title action. A quiet title action is designed to clear the title to a property and it is important to make sure a demand letter and proper notification is attempted before moving forward with a quiet title action. The law is very technical, so once again, it is vital to enlist the assistance of an experienced lawyer in pursuing this course of action. When quiet title actions are successful, the lienholder may not place a lien on the property in question.
For disputes around payment amounts or quality of work, you might need to file a lawsuit against the lienholder. This would typically be a last resort and there would need to be evidence to support the lienholder’s claim to unpaid work or services on the property. These cases will need to be reviewed by an experienced real estate attorney before taking this course of action.
Find an Arizona Real Estate Attorney for Liens Against Your Property
It can be concerning for any property owner to discover a mechanic’s lien or any type of lien has been filed against their property. Often this occurs during the escrow process when selling the property, which can make it even more stressful for the property owners. Whenever you discover a lien against your property, it is essential to hire an experienced real estate attorney to work on removing or disputing the lien as soon as possible. It is also vital to make sure that you handle all the documentation and required notifications correctly. The attorneys at RSN Law have helped Arizona homeowners remove wrongful liens, file quiet title actions and pursue lawsuits to resolve construction disputes for decades. Contact our firm today at 480-712-0035 to schedule an initial consultation or make an appointment on our contact us page.
RSN Law intends this article to be for informational purposes, not to be relied on a specific legal matter, and does not create an attorney-client relationship.