--------------------------------------------------------------------------------------- ¦ REFERENCE TITLE: mechanics' and materialmen's liens. ¦ --------------------------------------------------------------------------------------- ¦ ¦ ¦ ¦ ¦ ¦ ¦ State of Arizona ¦ ¦ House of Representatives ¦ ¦ Forty-fifth Legislature ¦ ¦ First Regular Session ¦ ¦ 2001 ¦ --------------------------------------------------------------------------------------- ¦ HB 2465 ¦ --------------------------------------------------------------------------------------- ¦ Introduced by ¦ ¦ Representatives Cooley, Avelar: Carpenter, Hatch-Miller, Hershberger, Huffman, Marsh ¦ ---------------------------------------------------------------------------------------
AN ACT
AMENDING SECTIONS 33-992 AND 33-992.01, ARIZONA REVISED STATUTES; RELATING TO MECHANICS' AND MATERIALMEN'S LIENS.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 33-992, Arizona Revised Statutes, is amended to read:
33-992. Preference of liens over subsequent encumbrances; professional services liens
A. The liens provided for in this article, except as provided in subsection B of
this section or unless otherwise specifically provided, are preferred to all liens,
mortgages or other encumbrances upon the property attaching subsequent to the time the
labor was commenced or the materials commenced WERE to be furnished except any
mortgage or deed of trust that is given as security for a loan made by a construction
lender as defined in section 33-992.01, subsection A, paragraph 1, if the mortgage or
deed of trust is recorded within ten days after labor was commenced or the materials
commenced WERE to be furnished. The liens provided for in this article except as
provided in subsection B of this section are also preferred to all liens, mortgages and
other encumbrances of which the lienholder had no actual or constructive notice at the
time he THE LIENHOLDER commenced labor or commenced to furnish materials except
any mortgage or deed of trust that is given as security for a loan made by a construction
lender as defined in section 33-992.01, subsection A, paragraph 1, if the mortgage or
deed of trust is recorded within ten days after labor was commenced or the materials
commenced WERE to be furnished.
B. A notice and claim of lien for professional services shall not attach to the property for priority purposes until labor has commenced on the property or until materials have commenced to be furnished to the property so that it is apparent to any person inspecting the property that construction, alteration or repair of any building or other structure or improvement has commenced.
C. If no labor commences on a property or no materials are furnished to the property, a registered professional may record and foreclose on a lien at any time after the registered professional's work has commenced if the registered professional's work has added value to the property. If labor or materials are furnished to the property, the priority of the registered professional's lien is governed by subsection B of this section.
D. Liens for professional services shall attach not before but at the same time, and shall have the same priority, as other liens provided for in this article.
E. If any improvement at the site is not provided for in any contract for the
construction of a ANY building or other structure, the improvement at the site
is a separate work and the commencement of the improvement is not commencement of the
construction of the building or other structure. The liens arising from work and labor
done or professional services or materials furnished for each improvement at the site
shall have a separate priority from liens arising from work and labor done or
professional services or materials furnished for the construction of the building or
other structure. A LIEN ARISING FROM AN IMPROVEMENT AT THE SITE HAS THE SAME PRIORITY
AS THE COMMENCEMENT OF WORK PERFORMED OR MATERIALS FURNISHED PURSUANT TO THE CONTRACT
UNDER WHICH THE IMPROVEMENT AT THE SITE WAS PERFORMED. For purposes of this
subsection, "improvement at the site" means any of the following on any lot or tract of
land or the street, highway or sidewalk in front of or adjoining any lot or tract of
land:
1. Demolition or removal of improvements, trees or other vegetation.
2. Drilling of test holes.
3. Grading, filling or otherwise improving.
4. Constructing or installing sewers or other public utilities.
5. Constructing or installing streets, highways or sidewalks.
Sec. 2. Section 33-992.01, Arizona Revised Statutes, is amended to read:
33-992.01. Preliminary twenty day notice; definitions; content; election; waiver; service; single service; contract
A. For the purposes of this section:
1. "Construction lender" means any mortgagee or beneficiary under a deed of trust
lending funds with which THAT ARE SECURED BY A MORTGAGE OR DEED OF TRUST IF THE
MAJORITY OF THE FUNDS LOANED IS INTENDED TO BE USED TO DEFRAY IN WHOLE OR IN PART the
cost of the construction, alteration, repair or improvement, is, wholly or in
part, to be defrayed, or any assignee or successor in interest of either.
2. "Original contractor" means any contractor who has a direct contractual relationship with the owner.
3. "Owner" means the person, or his THE PERSON'S successor in interest,
who causes a building, structure or improvement to be constructed, altered or repaired,
whether the interest or estate of the person is in fee, as vendee under a contract to
purchase, as lessee, or other interest or estate less than fee. Where such AN
interest or estate is held by two or more persons as community property, joint tenants or
tenants in common, any one or more of the persons may be deemed the owner.
4. "Preliminary twenty day notice" means one or more written notices from a claimant that are given prior to the recording of a mechanic's lien and which are required to be given pursuant to this section.
B. Except for a person performing actual labor for wages, every person who furnishes labor, professional services, materials, machinery, fixtures or tools for which a lien otherwise may be claimed under this article shall, as a necessary prerequisite to the validity of any claim of lien, 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 a written preliminary twenty day notice as prescribed by this section.
C. The preliminary twenty day notice referred to in subsection B OF THIS SECTION shall be given not later than twenty days after the claimant has first furnished labor, professional services, materials, machinery, fixtures or tools to the jobsite and shall contain the following information:
1. 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.
2. The name and address of the person furnishing such labor, professional
services, materials, machinery, fixtures or tools.
3. The name of the person who contracted for the purchase of such labor,
professional services, materials, machinery, fixtures or tools.
4. 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.
5. The following statement in bold-faced type:
In accordance with Arizona Revised Statutes section 33-992.01, this is not a lien and this is not a reflection on the integrity of any contractor or subcontractor.
Notice to Property Owner
If bills are not paid in full for the labor, professional services, materials, machinery, fixtures or tools furnished or to be furnished, a mechanic's lien leading to the loss, through court foreclosure proceedings, of all or part of your property being improved may be placed against the property. You may wish to protect yourself against this consequence by either:
1. Requiring your contractor to furnish a conditional waiver and release pursuant to Arizona Revised Statutes section 33-1008, subsection D, paragraphs 1 and 3 signed by the person or firm giving you this notice before you make payment to your contractor.
2. Requiring your contractor to furnish an unconditional waiver and release pursuant to Arizona Revised Statutes section 33-1008, subsection D, paragraphs 2 and 4 signed by the person or firm giving you this notice after you make payment to your contractor.
3. Using any other method or device which is appropriate under the circumstances.
D. The preliminary notice given by any claimant shall follow substantially the following form:
Arizona Preliminary Twenty Day Lien Notice
In accordance with Arizona Revised Statutes section 33-992.01, this is not a lien. This is not a reflection on the integrity of any contractor or subcontractor.
This preliminary lien notice has
The name and address been completed by (name and address of the owner or reputed of claimant): ownerisARE: Date: ___________________________
By: ___________________________
Address: ______________________
The name and address You are hereby notified that the of the original claimant has furnished or will contractorisARE: furnish labor, professional
services, materials, machinery,
fixtures or tools of the following
general description:
The name and address of any lender or reputed lenderand/orAND assignsisARE: In the construction, alteration or
repair of the building, structure
or improvement located at:
The name and address of the person with whom the claimant has contactedisARE: And situated upon that certain
lot(s) or parcel(s) of land in
__________ County, Arizona,
described as follows:
An estimate of the total price of
the labor, professional services,
materials, machinery, fixtures
or tools furnished or to be
furnished is $__________________
(The following statement shall be in bold-faced type.)
Notice to Property Owner
If bills are not paid in full for the labor, professional services, materials, machinery, fixtures or tools furnished, or to be furnished, a mechanic's lien leading to the loss, through court foreclosure proceedings, of all or part of your property being improved may be placed against the property. You may wish to protect yourself against this consequence by either:
1. Requiring your contractor to furnish a conditional waiver and release pursuant to Arizona Revised Statutes section 33-1008, subsection D, paragraphs 1 and 3 signed by the person or firm giving you this notice before you make payment to your contractor.
2. Requiring your contractor to furnish an unconditional waiver and release pursuant to Arizona Revised Statutes section 33-1008, subsection D, paragraphs 2 and 4 signed by the person or firm giving you this notice after you make payment to your contractor.
3. Using any other method or device that is appropriate under the circumstances.
(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.
Dated: ___________________ ___________________________
(Company name)
By: ______________________
(Signature)
___________________________
(Title)
(Acknowledgement of receipt language from Arizona Revised Statutes section 33-992.02 shall be inserted here.)
E. If labor, professional services, materials, machinery, fixtures or tools are
furnished to a jobsite by a person who elects not to give a preliminary twenty day notice
as provided in subsection B OF THIS SECTION, such THAT person is not
precluded from giving a preliminary twenty day notice not later than twenty days after
furnishing other labor, professional services, materials, machinery, fixtures or tools to
the same jobsite. Such THE person, however, is entitled to claim a lien only
for such labor, professional services, materials, machinery, fixtures or tools furnished
within twenty days prior to the service of such THE notice and at any time
thereafter.
F. The notice or notices required by this section may be given by mailing the
notice by first class mail sent with a certificate of mailing, registered or certified
mail, postage prepaid in all cases, addressed to the person to whom notice is to be given
at his THE PERSON'S residence or business address. Service is complete at the
time of the deposit of such NOTICE IN THE mail.
G. A person required by this section to give notice to the owner, to an original
contractor, to the construction lender, if any, and to the person with whom the claimant
has contracted need give only one such notice to the owner, to the original
contractor, to the construction lender, if any, and to the person with whom the claimant
has contracted with respect to all labor, professional services, materials, machinery,
fixtures or tools he furnishes FURNISHED for the building, structure or
improvement, unless the actual estimated total price for the labor, professional
services, materials, machinery, fixtures or tools furnished or to be furnished exceeds by
twenty per cent or more the total price in any prior original or subsequent preliminary
notice or unless the labor, professional services, materials, machinery, fixtures or
tools are furnished under contracts with more than one subcontractor, in which case
notice requirements shall be met for all such additional labor, professional
services, materials, machinery, fixtures or tools.
H. If a notice contains a general description required by subsection C of this
section of the labor, professional services, materials, machinery, fixtures or tools
furnished up to the date of notice, it is not defective because after such THE
date the person giving notice furnishes labor, professional services, materials,
machinery, fixtures or tools that are not within the scope of such THE general
description, or exceed by less than twenty per cent the estimated total price thereof.
I. Within ten days after receipt of a written request from any person or his
THE PERSON'S agent intending to file a preliminary twenty day notice, which request
shall identify the person, his THE PERSON'S address, the job site
JOBSITE and the general nature of the person's labor, professional services,
materials, machinery or tools to which the preliminary twenty day notice shall apply, or
within ten days of the receipt of a preliminary twenty day notice, the owner or other
interested party shall furnish such THE person a written statement containing
the following information:
1. The legal description, subdivision plat, street address, OR location
with respect to commonly known roads or other landmarks in the area, or any other
description of the job site JOBSITE sufficient for identification.
2. The name and address of the owner or reputed owner.
3. The name and address of the original contractor or reputed contractor.
4. The name and address of the construction lender, if any, or reputed construction lender.
5. If any payment bond has been recorded pursuant to section 33-1003, a copy of the bond and the name and address of the surety company and bonding agent, if any, providing the payment bond.
J. Failure of the owner or other interested party to furnish the information
required by this section does not excuse any claimant from timely giving a preliminary
twenty day notice, but it does stop the owner from raising as a defense any inaccuracy of
such THE information in a preliminary twenty day notice, provided the
claimant's preliminary twenty day notice of lien otherwise complies with the provisions
of this chapter. If the information is received by the claimant after the claimant has
given a preliminary twenty-day TWENTY DAY notice and the information contained
in the preliminary twenty-day TWENTY DAY notice is inaccurate, the claimant
shall, within thirty days of the receipt of this information, give an amended preliminary
twenty day notice in the manner provided in this section. Such AN amended
preliminary twenty day notice shall be considered as having been given at the same time
as the original preliminary twenty day notice, except that the amended preliminary twenty
day notice shall be effective only as to work performed, materials supplied or
professional services rendered twenty days prior to the date of the amended preliminary
twenty day notice or the date the original preliminary twenty day notice was given to the
owner, whichever occurs first. If a payment bond has been recorded in compliance with
section 33-1003 and the owner or other interested party fails to furnish a copy of the
bond and the other information as required by this section, the claimant shall retain
lien rights to the extent precluded or prejudiced from asserting a claim against the bond
as a direct result of not timely receiving a copy of the bond and the other information
from the owner or other interested party.