Lien Waivers in Arizona
Lien waivers are regulated in Arizona, and the state provides statutory lien waiver forms that must be used. In Arizona, a contractor or supplier cannot waive their lien rights in a contract. Arizona lien waivers do not need to be notarized. In Arizona, mechanics’ and materialman’s lien laws only apply to private projects.
Lien Waivers 101
A lien waiver is signed in exchange for payment, waiving the signer’s right to file a lien for the amount that was paid. Because the general contractor (GC) collects lien waivers from all subcontractors and other third parties on the project, everyone is protected by transparency and guaranteed to get what they earned. In other words, sending lien waivers builds trusting relationships because they are beneficial to both parties involved.
4 Types of Lien Waivers
- Conditional for Progress/Partial Payment
- Conditional for Final Payment
- Unconditional for Progress/Partial Payment
- Unconditional for Final Payment
Conditional lien waivers only waive lien rights upon receipt of payment, whereas unconditional waivers are enforceable as soon as they are signed, regardless of whether payment has been received.
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The Lien Waiver Process
- A preliminary 20-day notice is filed when work begins or supplies are provided
- Progress payments are made and lien waivers are signed and provided to GC and owner
- Work is complete and a conditional waiver and release on final payment is executed
- Payment is made and received and an unconditional waiver and release on final payment is executed
After this process is complete the owner/client has assurance that all who provided work or supplies on the job will not be filing liens on the property.
Is a Lien Release/Release of Lien Different Than A Waiver?
Although waivers are sometimes called releases, lien releases usually perform the different function of cancelling a lien that was already filed, typically being signed after payment of a lien is satisfied.
Tips for Minimizing Risk
Signing away your right to lien can be risky, so here’s some tips to make sure you don’t get yourself into trouble by making a costly mistake:
- Check to see if you’ve received payment
- Match the payment type (partial/final) with the waiver type
- Double check to make sure the numbers and dates on the waiver are correct
- Don’t waive more or less than you intend
- Ask a lawyer if you are confused or if there is any complicated language
Conclusion
Emerald Inc. takes pride in its scrupulous record keeping and administration of lien waivers. As discussed in this post, it’s beneficial for both a general contractor and all subs, suppliers, and other third parties to send lien waivers with payment– doing so has helped us build many relationships of trust over the years.
Are you ready to partner with us on a construction project? Email us today or call us at 480-832-9808 so that we can discuss the details and start working on your bid!