In Arizona, anybody that supplies labor, professional services, tools, materials, machinery, or fixtures in construction projects may be entitled to file a mechanic’s lien on the property to guarantee they receive payment from the owner of the property. These lien laws are intended to safeguard contractors, sub-contractors, suppliers, or anybody else that has supplied labor, services, or materials from non-payment by the property owner. Nevertheless, mechanics’ liens safeguard the contractor, sub-contractor, or suppliers, lien waivers provide a safeguard to the property owner that a lien is not going to be filed provided that the owner has made adequate payments. These waivers help safeguard the owner from having to pay double in order to release an impediment on the property. The same holds true for general contractors that have contracted with lower-level sub-contractors or suppliers.
How Do Lien Waivers Work?
However, in what way does the lien waiver process work? Thankfully, Arizona’s mechanics’ lien rights and waivers are specified in the Arizona Revised Statutes. Additionally, the statutes establish terminology for preliminary lien notices and lien waivers that must be “substantially adhered to” to be legitimate and effective. These stipulations help streamline the process and stop various forms being used. This lien process begins with the requirement that contractors, sub-contractors, and suppliers file a preliminary twenty-day notice when they start work or initially provide supplies for the purpose of preserving their lien rights. The preliminary twenty-day notice is not a lien but notice to the associated parties that the individual filing the preliminary notice retains the right to file a lien as the result payment is not received. In most cases, as the work on the construction project advances, the owner is going to make progressive payments (usually monthly) for the work finished to that specific date. The time at which the initial progressive payment is carried out is the time at which the initial set of lien waivers get signed and given to the contractor and property owner.
Lien Waiver Release
In Arizona, there are four primary types of lien waivers:
- Conditional Waiver and Release on Progressive Payment
- Un-conditional Waiver and Release on Progressive Payment
- Conditional Waiver and Release on Last Payment
- Un-conditional Waiver and Release on Last Payment
A Conditional Waiver and Release on Progressive Payment is used when the contractor, sub-contractor, or supplier are going to be receiving a progressive payment. However, that payment has not actually been received at the time of putting the lien waiver into effect. This conditional waiver establishes that the waiver is conditioned upon the receipt of the payment(s). If the payment is not provided, the lien waiver will not be effective. After the progressive payment is provided and truly received by the contractor, sub-contractor, or supplier, the Unconditional Waiver and Release on Progressive Payment can be put into effect. There may be additional payments down the road, however, this lien waiver accepts that particular progressive payment receipt. When work on a construction project is finished and last payment is to be provided to the contractor, sub-contractor, or supplier, a Conditional Waiver and Release on Last Payment can be put into effect.
Lien Waivers in Conclusion
Moreover, this lien waiver is conditioned on the last payment truly be made and received. After the last payment is provided and truly received by the contractor, sub-contractor, or supplier and no more payments are going to be provided, the Unconditional Waiver and Release on Last Payment can be put into effect. Following all payments have been provided and the Unconditional Waiver and Release on Last Payments have been given, the owner has assurances that those specific contractors, sub-contractors, or suppliers who received the unconditional lien waivers are not going to be filing mechanics’ liens on the property. Whereas the system of mechanics’ lien and lien waivers may not be ideal, it provides particular protection to both contractors, sub-contractors, and suppliers and, additionally, to the property owners.
Dar-Liens Offers Lien Processing and Filing in Arizona
Dar-Liens Offers Processing and Filing of the following types of Liens: Pre-Liens, Notices to Owner, Medical Liens, Construction Liens, Mechanics Liens, HOA Liens, 20 Day Preliminary Lien Notices, and more.
