A Quick Guide to Legal Property Descriptions for Arizona Contractors

Currently, only 11 states require Legal Property Descriptions (per A.R.S. Sec. 33-993) and Arizona happens to be one of them. This means contractors have to include the Legal Property Address of the project site when they file a lien. If a contractor neglects to include this, it could result in a lien being considered invalid.

Just a simple address? Sounds easy enough, right? Actually, no, it’s much more than an address. If you were to put a Legal Property Description in your navigation app, it wouldn’t take you to the right place.

What exactly is a Legal Property Description?

In short, a Legal Property Description is a written record of a specific land or parcel. Its main purpose is to provide legal evidence of the property boundaries to guide surveyors in creating property lines. They’re intended for county record offices, so the average citizen might not recognize the language, as many specific terms are used. Because of the unique way these Legal Property Descriptions are created, we’ve put together a quick guide to help you understand why they matter, and how you can acquire one!

A Legal Property Description must always:

• Include the county and state the property is located in
• Describe the property in a very specific manner, identifying all the boundaries of a specific piece of land
• include enough information for a licensed surveyor to use when creating property lines.

Remember that it does not require that the street address be present.

When filing a lien, contractors may make the mistake of: 

• not including the Legal Property Description
• describing the wrong property
• writing an actual physical description of the property

There are three main ways Legal Property Descriptions are written in order to describe the physical features of the property.

1. Fractional Designation – Using rectangular surveying to describe the land in sections.
2. Metes and Bounds – Using references, such as streets and rivers, to identify each point of the property.
3. Lot and Block Survey – Breaking the land into plots or blocks to designate boundaries.

How to find the Legal Property Description of your project site:

Legal Property Descriptions are obtained by searching for them, not writing them yourself. One option is to obtain a copy of the last recorded deed from the county recorder’s office. You can search county recorder’s or assessor’s websites by the municipal address, or owner name to identify the parcel number assigned by the county and possibly access the deed. Legal Property Descriptions are one of many elements that make lien filing complicated.

By providing accurate and specific project locations (address or parcel numbers) for identification on your preliens, Titan Lien Services can take care of these nitty-gritty details on your behalf. Having an expert like Titan Lien Services on your side ensures you don’t have to navigate “legal descriptions” alone!

You have so many options when it comes to selecting the right lien service provider. So it’s critical to do your research and properly think through each of your options. Because of the complexity of each lien document, it’s a decision you should not take lightly. Here are some things to consider that will help get you on the right track. 

How is their attention to detail?

When it comes to lien documents, attention to detail is an absolute necessity as there is so much information. When you are starting your search for potential lien service providers, pay attention to their level of care about the little details. See if they can properly outline each step of the lien process clearly so you know exactly what to expect. 

Is their process simple or complicated?

Protecting your work and lien rights should be straightforward, so if their process is hard to understand, take that as a red flag. Get to know their process and make sure it’s simple and easy to follow.

What are their response times like?

In the world of construction, timing is everything, so you need to make sure that your lien service provider will give you quick and accurate responses. Take a look at each companies customer reviews and make sure this is a highlighted benefit that is mentioned. 

What kind of educational resources can they provide?

Education about your lien rights is crucial as a contractor. If they offer blog posts, seminars, guides, or anything that will help you learn more about your lien rights, that’s a good sign. Check out their website and see if they regularly update resources that will help you answer questions that you might have.

What can they teach you about lien law?

Bottom line, lien service providers can’t give you legal advice. But they can educate you on the laws of your state! If they have added legal educational options, that’s a huge plus to look out for.

Are they connected to any lawyers?

A strong network of credible sources can work wonders for you and your business. Ask every potential provider who their legal connections are. You never know when legal action might have to be taken, and it’s a good thing to have in your back topic.

Do they track the right deadlines?

From the start date of a project, to when a prelien was mailed, all the way to the close of a project there are many details worth keeping track of in order to help you stay organized in the lien documentation process. Make sure you know which details are being tracked by your lien service provider, the more detailed the better.

Every contractor knows that cash flow is an essential part of a construction business. However, the downside is that but it can be a challenge to keep up with as project payments can move at a slow pace. You have to take care of your workers and suppliers. Paying them ASAP is critical, however, it takes up cash flow, leaving you in a bind as you wait for payment on other projects.

But what many contractors don’t realize is that sending preliminary notices actually IMPROVES your cash flow. Here’s how it works.

Improves Lines of Communication

Once you send a preliminary notice, lines of communication are made clear from the beginning, so owners and GC’s know exactly what improvements are being made, materials provided and who needs to be paid for the project. 

Payment Alerts

Now that communication has been established, the client has an alert of a payment that needs to be taken care of and they can now prioritize it, and know exactly who should be paid and when.

Quicker Payments

As a result, you may be paid quicker, and the client now eliminates the risk of having a lien on their property as a result of a non-payment, a win-win for everyone!

Fund Other Projects

Now that you’ve been paid, cash tightening is no longer a problem. You are free to now start to fund another project, plan ahead, and continue to operate smoothly.

Keep in Mind

Owners Want to Avoid Property Liens

If for whatever reason a project is not paid for, a mechanics lien may be the next step. This is a document that states that unpaid construction businesses can freeze the property, which is something owners want to avoid at all costs. Sending prelims ensures that the owner knows who is working on the project so they can pay the appropriate contact, and avoid having a mechanic’s lien on their property! 

Improves Supplier Relationships

The sooner you are able to pay your supplier, the happier your supplier is. Building a long-term relationship with a quality supplier is one of the many keys to a successful business. If you can’t afford to pay your supplier it could stop production entirely, resulting in a delayed project.  With cash flow coming in quicker from sending in your prelim, you are able to get your suppliers paid quicker, resulting in efficient project management! 

Improve your cash flow with our easy-to-use online portal where you can send prelims and track payment progress on any project starting at just $25.00! 

Everyone on a construction project benefits from lien waivers as they are an important tool in the construction payment process. Lien waivers are the release of lien rights up to a predetermined dollar amount. This is usually done once payment has been received by the contractor, sub or supplier. No one wants to deal with a mechanics lien when they are at the top of a project, so lien waivers are a critical piece to show a receipt of payment.

Here’s an example of how they are used: A general contractor pays a subcontractor for laying tile. The subcontractor then signs a lien waiver, giving up his lien rights on the amount that they were paid.

They sound simple and straightforward, but actually, these documents can be quite elaborate and long. It’s important for everyone to understand the different types of waivers and how they work.

Different Types of Lien Waivers

There are 4 common types of lien waivers used across the US and it’s important to know which ones to use in specific situations, and most can be broken down into two categories – conditional and unconditional.

Conditional Waivers

Conditional waivers are signed by the owner or contractor receiving services. Once you have completed the work and received payment, the condition has been met.  There are two types of conditional waivers that can be used.

Conditional Partial Payment

Conditional partial payment waivers are used when you expect regular progress payments throughout your work on the job. Once the money is hin have, you commit to lien rights for work performed up to that point. These can be signed in advance without risking your lien rights.

Conditional Final Payment

These types of conditional waivers should only be used when you are expecting your final payment-in-full for what you are owed on the project. They are deemed invalid if you do not receive a complete payment, so you can retain your lien rights.

Unconditional Waivers

In unconditional waivers, lien rights are waived the moment they’re signed – regardless of if you’ve received payment. Similar to conditional waivers, there are also two unconditional waiver options, unconditional partial payment, and unconditional final payment.

Unconditional Partial Payment

This type of waiver is used exclusively when you are expecting regular progress payments and want to release your lien rights for work you have already been paid for. It’s effective as soon as it’s signed and therefore should be executed only when you have the payment in hand. 

Unconditional Final Payment

These lien waivers should only be signed upon completion of the project and receipt of final payment. They are a formal release of all lien rights without protection and should therefore be executed and signed ONLY once you have the money in hand and in the bank.

It’s important to note that not every state regulates lien waivers. In fact, only 12 states have set requirements in place on what must be included in those documents, and if not followed to it’s exactness, it can could result in a penalty. Be sure to read up on your specific state to learn more. 

At Titan Lien Services, we ensure your work is protected by verifying and filing all required documents needed to secure your lien rights. As an added benefit, we also generate lien wavers for free for anyone who uses our portal.

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At the end of the day, filing a lien is a  great way for contractors to protect their rights. However, many don’t realize how crucial it is in states where it’s required. If a situation arises where you need to move forward with a mechanics lien, making this first deadline is critical and doesn’t cost you much.

Let’s first took a look at the average General Contractor Fee:

Now let’s look at the savings of sending a prelien versus the losses that happen when a contractor neglects to do this.

Preliens have many benefits, including letting the owner know that the contractor is aware of their lien rights, opens up the lines of communication, prevent further filing of liens, and encourage quick payments to contractors.

In short, yes! There are so many benefits to subcontractors who send preliminary notices (preliens) on every project. However, because of negative associations that come with preliens, many become hesitant and don’t send a prelien as part of their business process. As a result, they’re missing out as everyone can benefit from a prelien.

Advantages of Sending Prelims Every Time

The truth is, preliens do so much more good than harm for all parties involved. Here are a few ways your business can benefit from preliens.

They Promote Great Communication

Open communication is key when it comes to keeping the key individuals in the loop! The purpose of a prelien is to notify hire ups, owners, and any other parties of who exactly is involved in the construction project within 20 days of the start date. This also establishes who needs to be paid for the project, and when, giving you the visibility you need to get paid faster.

They Give You a GREAT Business Reputation

Not only does sending a prelien help communication, but it’s also a great way to leave a professional impression on your GC and all others involved. Making sure the project goes smoothly without any unnecessary roadblocks along the way is a great way to position yourself and your business in a positive light.

They Allow Yout To Protect Yourself

Whether you are working with brand new parties or you are familiar with all involved on a project, it’s so important to have yourself and business protected from nonpayment situations. You deserve to be paid for the work you do, and you just never know when situations arise that might lead to filing a mechanics lien. It’s better to be overly prepared just in case than to wish you were covered later on!

They Get Your Paid Faster

With a prelien in place, owners are notified that they have an outstanding payment, which more often times than not, allows your payment to be taken care of first since you’ve taken the initiative to secure your lien rights. 

What Does An Arizona Mechanic’s Lien Do?

 A mechanic’s lien is a legal tool that gives unpaid contractors a security interest in the property that they worked on without pay. As a contractor, it’s important to be educated on the lien laws in your state to ensure that your lien rights are protected and that you are getting paid for your work!

Who Can File An Arizona Mechanic’s Lien?

• Direct contractors
• Subcontractors
• Material suppliers
• Laborers down to second-tier subs

How to Prepare an Arizona Mechanic’s Lien

As a contractor, it’s important to be educated on the lien laws in your state to ensure that your lien rights are protected and that you are getting paid for your work! To file a Mechanic’s lien, sign up with Titan Lien Services. We’ll take the reins from there, and do all the heavy lifting on your behalf. The infographic below explains what information you’ll need to prepare 

Arizona Lien Deadlines:

How to File a Mechanic’s Liens Work in Arizona for Public Property?

As a contractor or material supplier, it is important to know what your options are for protecting your income when working on any project. When it comes to publicly-owned property, filing a mechanics lien on the project isn’t an option, but you may be able to file a Bond Claim. 

What is a Bond Claim?

Just like a mechanics lien (which is used only for privately-owned properties), bond claims are used to ensure payment when working on publicly-owned or government properties. A payment bond is usually issued by an insurance company or financial institution at a state-determined value. 

Common Mechanic’s Lien Mistakes that Arizona Contractors Make

When filing your Mechanic’s Lien, it is in your best interest to have an airtight lien filing experience. Plenty of people may try to fight a lien, and they’ll be diligently looking for any mistakes you’ve made along the way in hopes of invalidating your lien rights. Learn from others’ lien filing mistakes, and arm yourself with information on what to avoid when it comes to mechanic’s liens.

• Not understanding your lien rights 

Before filing, make sure you have followed the state requirements to ensure you have lien rights. There are several factors to consider, including if you need a valid contractor’s license, notice requirements and how they are served, and doing it all within the strict time frames set by each state.

• Incorrect forms with missing or inaccurate information

Accurate property descriptions are essential, and this means more than just getting the address right. If you are unsure of an exact address, provide a parcel number or use an aerial map, to provide a visual of the property being improved. Ensure that all other information provided is accurate.

• Missing the deadline to file

Liens must be filed before their deadline, otherwise you’ll lose lien rights. Refer to state statutes to know those deadlines or consult your legal counsel.

• Not sending required notices 

In many states, contractors may be required to send a preliminary notice, notice to owners or notice to general contractors, notifying relevant parties of their involvement on the job. Some states have Intent to Lien requirements before filing a lien.

• Misapplying lien practices you’ve heard from other contractors

It’s important to note that lien laws differ state to state, so be sure you are not working off what you “heard from another contractor,” who may be working under different state law.

• Filing on your own without a professional firm

There’s no shortage of red tape in the lien filing process. A professional lien services firm can help you avoid these mistakes. The smartest move a contractor can make is to not go at it alone. 

What is a letter of intent to lien?

Simply put, a letter of intent (aka notice of intent) is a payment demand letter. When your client hasn’t paid you for your work, you can send this document as a warning that if payment isn’t made, a lien is right around the corner. It is often effective as it is mailed to all parties in the construction chain (not just to your client). 

Am I required to send a letter of intent?

In Arizona, it is not required that a letter of intent be sent prior to filing a lien, but a few states do require it. It is important that you are aware and understand the state statutes and lien timeframes for the state you are working in.

Is it a good idea to send a letter of intent?

How does it differ from a prelien? 

While both documents help obtain project payment that is owed, they aren’t the same thing. 

Prelien

• Document that notifies all parties involved of your involvement in the permanent improvement of real property that’s sent to all parties up the chain from you on the project protects your lien rights should you need to file a lien.
• Should be sent within 20 days of the start of a project in Arizona, before any payment is due. 
• Required in AZ and several other states in order to protect your lien rights. 

Letter of Intent 

• Document that warns all parties that if payment isn’t made, a mechanics lien will be filed. 
• Is sent after a prelien is mailed and right before a lien is filed. 
• Is sent before a lien is filed, and is not required in Arizona, but is very effective in obtaining payment without having to file a lien. 

While a letter of intent is a helpful tool to get you paid, it still may not be enough; in which case you may still choose to file a Mechanics Lien!

Haven’t been paid for a project? 

Send a letter of intent with Titan for only $50 plus mailing fees!