When May a Subcontractor Lien (Residential v Commercial)?
Today’s post is another installment from last November’s Arizona Lien Law Seminar. In this installment we talk about the difference between residential and commercial projects and how that affects subcontractor lien rights.
As a subcontractor on a residential project in Arizona, you ONLY have lien rights if you have a contract directly with the owner. This is important to understand. If you are a subcontractor coming onto a residential project, you may want to (a) have the owner sign off on the proposal acknowledging that the owner is an additional party to the contract and that while you will first look to the general contractor (or other primary party with whom you contracted) for payment, you reserve the right to pursue the owner directly in the event of non-payment; or (b) you may want to adjust your contract terms to require more up front to cover your costs; or (c) have the general contractor to provide a payment and performance bond.
Our firm regularly offers to contractors an inexpensive seminar on Arizona’s mechanic’s lien laws. If you are an Arizona contractor, and particularly if you are a new contractor, we encourage you to get educated about Arizona mechanic’s lien laws to be better able to protect your interests and obtain some security for payment for your work.
Mechanic’s liens are just one tool to assist contractors with getting paid. Remember that most construction in Arizona is subject to Arizona’s Prompt Pay Act. That act provides specific requirements for jobs that last more than 30 days and provides methods, rights and responsibilities for owners, general contractors, and subcontractors.
If you have a job on which you haven’t been paid, we are here to help. Of course, a blog article like this is not legal advice and is not a substitute to meeting with a lawyer to get advice on your specific case. If you would like to schedule an consultation appointment, either by filling out the contact form or by calling 480-222-2225.