› Arizona 20-Day Preliminary Notices

Arizona 20 Day Preliminary Notices and Forms

If you want lien rights on your projects then you must be sure to timely (and to the correct entities) serve the Arizona 20-day Preliminary Notice...

By Diane Dennis

Image of Arizona State

If you need the Arizona 20-Day Preliminary Notice Form but not the information below here then please click here.

As indicated above, if the contractor wants lien rights then he must properly file/serve the prelim (preliminary notice)

The Arizona laws are very strict on what a preliminary notice is supposed to 'say', the text of the proof document, the timing of service, etc.

The Arizona laws that I'm referencing while writing this are:

Title 33 Property - Article 6

  • 33-981
  • 33-992.01
  • 33-992.02

There are a lot of 'ins and outs' to these laws and I'm going to attempt to break them down into contractor language rather than the current gobbledy-gook format that they're in... ;o)

Per Arizona law a person/entity that is required to give a preliminary twenty day notice (such as say ... a contractor!) ;o) will *not* have mechanic's lien rights unless:

  • S/he did indeed do the 20-day notice with the exact verbiage required by the state and
  • S/he has a Proof of Service document that has the exact verbiage required by the state and
  • The service method s/he used meets the requirements as per Arizona law and
  • S/he has the actual post office service documentation (such as a return receipt) that is required to be kept with his/her Proof of Service document
  • and ... and ... and ...

If your preliminary notice mail goes unclaimed by the addressee

It'll be returned to you as 'unclaimed'.

Keep that returned mail (every bit of it including the envelope itself) as the 'proof of service documentation' and, as required by law, attach it to your Proof of Service Affidavit.

The law allows you your full lien rights under the preliminary notice even though it went unclaimed at the post office because it's considered as having been properly served.

But you have to have followed all of the requirements, every last one of them.

 A brief explanation of what the '20 (twenty) days' means

The preliminary notice protects your lien rights going back as far as 20 days from the date you serve the notice, and then it stays in effect through the end of the project meaning you'll have mechanic's lien rights for the rest of the project.

If you started on the project longer than 20 days ago you still must to do the notice.

  • If it's been 30 days since you started the project then it's only the first 10 days that won't be covered (because the notice protects up to 20 days prior to the date it's served).
  • If you miss it by a day or two then it'll be that day or two that won't be protected.
  • If you completed the project longer than 20 days ago then chances are you won't have any lien rights on the project whatsoever. But don't take my word on it, be sure to speak with an attorney (it's free here).

So make sure you do your preliminary notices and that you do them in a timely manner - preliminary notices are one of the first things you must do when starting a project - or you might not get paid.

Who is required to serve the Arizona 20-Day Preliminary Notice

If you're involved in a project where you're supplying labor and/or material and/or services and/or machinery and/or some fixtures and tools (there are exceptions) and/or machinery, you need to do a preliminary notice to protect your lien rights.

Pretty much the only 'entity' that doesn't have to file a prelim is the paid employee.

So unless you're an employee employed by the construction company you'll be required to serve a preliminary notice.

Beware of the home owners who will use the lien laws to rip you off - legally

Property/home owners are getting savvy about the various laws and regulations and those that are less than honest use the lien laws to get out of paying their contractor(s) - and it's legal if the contractor didn't do the prelim.

Unfortunately there's always someone that will take advantage anywhere and everywhere they can.

So many people think that the contractor is *always* the bad guy when a 'situation' arises on a project but there are plenty of times when it's the home/property owners burning the contractors rather than the other way around.

It is *very* important to your business, your sanity, your livelihood, etc. to keep yourself aware of the various laws - even if for no other reason than there's a good chance your customer knows them or will learn them during the project (and you might get stuck with one of those 'less-than-honest' property/home owners).

What's required to appear in the preliminary notice...

Before anything I should let you know in case it's not a common 'slang' word with contractors in Arizona, a lot of times the Preliminary 20-Day Notice is referred to simply as a prelim. I'll end up doing that a lot within this article.

Humorous ImageConstruction is such a dry topic; I've got to add some humor in once in a while... :o) Artist Unknown
  • A general description of the labor, professional services, materials, machinery, fixtures or tools furnished or to be furnished and an estimate of the total price thereof.

  • The name and address of the person furnishing labor, professional services, materials, machinery, fixtures or tools.
  • The name of the person who contracted for the purchase of labor, professional services, materials, machinery, fixtures or tools.

  • A legal description, subdivision plat, street address, location with respect to commonly known roads or other landmarks in the area or any other description of the jobsite sufficient for identification.
  • A massive statement to the Owner along with a special notice, all of which explains to the property/home owner what an Arizona 20-Day Preliminary Notice is (and that it's *not* a lien).

I was really surprised to discover that with the next requirement Arizona has actually surpassed California in regard to the 'toughness' of the lien law! California is *usually* one of the toughest states on requirements for contractors and their paperwork.

Contractors are required to include specific text on their preliminary notice that the Owner fills out and sends back to the claimant (the contractor).

It's basically a form for the Owner to fill in that's contained within the preliminary notice form itself (oh just wait, this is all going to get even more twisted...) ;o)

The text required to be included on the prelim form, as per 33-992.01, is for the Owner to:

  • Notify you of any inaccuracies in your preliminary notice so that you can fix them and re-serve your prelim (the 'service date' of the revised prelim is considered to be the same as the date that you served the original prelim)
  • Provide you with bond information should there be one (or more)

If the homeowner does *not* acknowledge receipt and/or does *not* notify anyone of any inaccuracies in their documents and/or does not provide bond information if applicable...

The law gives the Owner a limited amount of days to acknowledge receipt of your preliminary notice.

He's also required to notify you of any inaccuracies in your prelim notice.

In addition if there's a bond involved then he's also required to notify you of that including the bond company, number, etc.

However...

Remember the 'More tWiStEd' that I mentioned above

In the various laws is the text for the documents:

  • The Arizona 20-Day Preliminary Notice form

  • The Proof of Service Affidavit form

  • The acknowledgement from the Owner

But, as is typically the case with the wonderful legislators across our country, they mucked it up...

The requirements for the Owner's acknowledgement of receipt, that you're supposed to include on/within your preliminary notice for the Owner's use, differ depending on what section of the law you're looking at (both sections - 33-992.01 & 33-992.02 - are about preliminary notices).

Arizona Statute 33-992.01 states:

Within ten days of the receipt of this preliminary twenty day notice the owner or other interested party is required to furnish all information necessary to correct any inaccuracies in the notice pursuant to Arizona Revised Statutes section 33-992.01, subsection I or lose as a defense any inaccuracy of that information.

Within ten days of the receipt of this preliminary twenty day notice if any payment bond has been recorded in compliance with Arizona Revised Statutes section 33-1003, the owner must provide a copy of the payment bond including the name and address of the surety company and bonding agent providing the payment bond to the person who has given the preliminary twenty day notice.

In the event that the owner or other interested party fails to provide the bond information within that ten day period, the claimant shall retain lien rights to the extent precluded or prejudiced from asserting a claim against the bond as a result of not timely receiving the bond information.

Arizona Statute 33-992.02 states:

If the Owner fails to complete the acknowledgment or fails to complete and return the acknowledgment within thirty days then he can't use the prelim as an acceptable argument.

However the wording on the preliminary notice that's for the Owner, as required by 33-992.01, lists only the 10 days for errors and the 10 days for providing information regarding any bonds.

It does not require that the statement about the 30-day deadline be included.

Straight from 33-992.01:

(The following language shall be in type at least as large as the largest type otherwise on the document.)

Within ten days of the receipt of this preliminary twenty day notice the owner or other interested party is required to furnish all information necessary to correct any inaccuracies in the notice pursuant to Arizona Revised Statutes section 33-992.01, subsection I or lose as a defense any inaccuracy of that information.

Within ten days of the receipt of this preliminary twenty day notice if any payment bond has been recorded in compliance with Arizona Revised Statutes section 33-1003, the owner must provide a copy of the payment bond including the name and address of the surety company and bonding agent providing the payment bond to the person who has given the preliminary twenty day notice. In the event that the owner or other interested party fails to provide the bond information within that ten day period, the claimant shall retain lien rights to the extent precluded or prejudiced from asserting a claim against the bond as a result of not timely receiving the bond information.

That's it; there's nothing within the government's required text about the 30-day failure to reply keeping the Owner from using the prelim as a defense - which in essence gives the contractor full lien rights no matter mistakes.

This does however assume that the prelim *was* served as required.

So what should be included in the Notice for the Owner

These issues beg the question - what should be included in the Owner's acknowledgement section?

Include it or not?

"If it were me, I'd include that third bit of information to avoid the potential "But your Honor, I didn't know, it doesn't say it here on the document" issues". :o)

If the part about the 30 days and the Owner losing the defense of the preliminary notice is *not* included, might that cause a problem in the trial (Owner: "Your honor, nothing told me that I had to respond within 30 days") - even though the law didn't require you to include that information?

If an addition is made to the document to inform the Owner of the 30 day deadline will that invalidate the document?

Reminding everyone that I'm not attorney and I do not give legal advice and I've not had legal training (just 20 years of helping contractors through the nightmares) ;o) this is my thought...

The requirements in the law state that the form must follow 'substantially' what's written in the statutes. Adding that statement about the 30 days doesn't in any way alter the 'substantial-ness' of the document and indeed provides additional value to the document (because it provides additional, pertinent, information to the Owner).

Therefore, if it were me, I'd include that third bit of information to avoid the potential "But your Honor, I didn't know, it doesn't say it here on the document" issues. :o)

Get the form

Here's my #1 recommendation as your resource for a downloadable, fill-in-able, savable, reusable Arizona 20-Day Preliminary Notice form.

I had a kind of a tough time writing this article because of the confusion within the laws... If you find something that seems a bit off or have something to add/delete please let me know below so that I can check it out. :o) Thank you! Diane
PS: Below the comment box is a list of other articles specific to Arizona. The articles are currently at one of my other construction websites but I'm working at moving all of them to this website.

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