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!