What is a Mechanics Lien?

What is a Mechanics Lien?

Building or remodeling a home or other structure can involve several specialized service providers. With new construction, a project developer often contracts with independent contractors and companies to perform work within a house or building. ?Homeowners may use a general contractor to renovate part or all of their property. If a service provider isn?t paid for their work in a home or other structure, they may have recourse through a mechanics lien. If you are unfamiliar with the term and are considering hiring a contractor to perform work on your property, you will want to know: What is a mechanics lien?

What is a Mechanics Lien?

Simply put, a mechanics lien is a lien that a contractor or service provider can have attached to a property upon which they have performed labor or services when they are not paid for their work. Outside of some limited exceptions, this remedy is available under Arizona law to ?every person who labors or furnishes professional services, materials, machinery, fixtures or tools in the construction, alteration or repair of any building, or other structure or improvement?? When an individual or companies does not get paid according to their contract with the property owner or party responsible for contracting for the job, they can file a lien that will attach to the property.

The mechanics lien will be part of the property’s title record and will notify other parties that the title is encumbered because the owner owes an unpaid debt to the lienholder. After the lien is filed, the lienholder can file suit against the property owner and pursue foreclosure. If the case is successful, the property will be sold, and the lien will be paid from the proceeds.

Who has the Right to File a Mechanics Lien?

According to the definition of who has the right to file a mechanics lien, many service providers involved in a construction project will be eligible. This includes plumbers, electricians, painters, roofers, and others who routinely work on a home or structure. Generally, the lienholder must have had a contract with the property owner to pursue a mechanics lien. This may end up excluding some sub-contractors who do not have a contract with the owner.

There are exceptions regarding who can file a mechanics lien, however. Suppliers do not have lien rights to the property. Further, if the owner occupies the property, there must be a written contract with the owner for the claimant to have the right to file. Design professionals must also have a written agreement with the owner or someone hired by the owner to file a mechanics lien. Additionally, if a general contractor makes a claim, the individual must be licensed.

When Must a Mechanics Lien be Filed?

Arizona law requires that a party seeking to file a mechanics lien send a 20-day preliminary notice. As the name implies, this notice must be sent within 20 days of the person first ?furnishing professional services, materials, machinery, fixtures or tools to the job site.? The injured party must also serve ?the owner or reputed owner, the original contractor or reputed contractor, the construction lender, if any, or reputed construction lender if any, and the person with whom the claimant has contracted for the purchase of those items? with the twenty-day notice.

Potential mechanics lien holders have 120 days from the project?s completion to file a lien. If a Notice of Completion has been filed on the project, the deadline is limited to 60 days after this notice is filed. A mechanics lien is effective for six months from the date of filing. This is the period the claimant has to initiate a case and enforce the lien.

How is a Mechanics Lien Filed?

To file a mechanics lien, the injured party would need to prepare a claim with certain specific pieces of information included. The claimant would then file the lien with the Arizona county recorder?s office where the property is located. Once the lien is recorded, the claimant must send notice to the property owner within a reasonable time. If non-payment continues, the lienholder may be able to foreclose on the property.

Laura B. Bramnick is an experienced Arizona real estate attorney who can help you manage all aspects of your Arizona real estate matter. If you are seeking an exceptional, client-driven real estate lawyer in Scottsdale, Phoenix, Sedona, and throughout the State of Arizona, contact Laura B. Bramnick to schedule your consultation.


Previous Post
How to Avoid a Real Estate Purchase Contract Breach
Next Post
When Can a Commercial Lease Tenant be Locked Out?