As much as you may enjoy working in construction, owning your own company and taking on new projects, it is not a hobby. It is your livelihood, and receiving prompt payment is part of what makes the work pleasurable. You need to purchase materials, cover your overhead, pay your employees and support your family. When a client or project owner refuses to pay what he or she contractually agreed to, there is a ripple effect of financial trouble.
In the past, you have taken steps to claim the money your customer owes you. You probably sent an invoice followed by a reminder or two, a friendly email, or a phone call asking for prompt payment. If you still did not receive what the client owed, you had to weigh the pros and cons of taking the customer to court to get your money. The next time around, you may want to take advantage of your right to protect yourself with a mechanics' lien.
Giving preliminary notice
A mechanics' lien is a tool you can use to ensure payment from the owners of the properties on which you make improvements. One way or the other, you will get paid for your work because you legally place a lien on the property. Often, you will not have to follow through with the process of asking the court to sell the property at auction so you can get your money. The preliminary notice may be enough to prove to the owner that you mean business.
If you are willing to use the mechanics' lien option, Arizona law requires you to give preliminary notice to everyone involved in the project within 20 days of the delivery of the first materials to the job site. This is a critical step in protecting your right to payment, and most project owners and lenders expect to receive this notice.
You are not placing the lien at this early stage, but you are informing those involved that you are prepared to exercise your right to file a lien. You must carefully word a preliminary notice, and it is wise to have professional help with this step.
Recording the lien
If you run into trouble getting paid for work you completed, you can record the lien. You have a limited amount of time to do this, so it is best to work with an attorney who is well-versed in Arizona construction laws. Generally, if you have not received payment within a certain time after completing the work, you can record the lien. The lien will prevent the owner from selling the property or refinancing it until you receive full payment for your work.