Happy 2020! Claimants Now Have Lien Rights for Up to 130% of the Preliminary Notice Estimate

Under Arizona lien law, the preliminary twenty day notice must include "an estimate of the total price" of labor, professional services, materials, machinery, fixtures or tools "furnished or to be furnished" to a project. A.R.S. § 33-992.01(C)(1). For projects commencing before December 31, 2019, lien claimants are required to send an amended preliminary 20-day notice if the total price of labor, professional services, materials, machinery, fixtures or tools furnished or to be furnished exceeds the original estimate in the preliminary notice by more than 20% of the estimate in any prior preliminary notices. A.R.S. § 33-992.01(H).

However, the Arizona Legislature amended the lien statute in 2019 to increase the percentage from 20% to 30%. In other words, a party will now have lien rights for up to 130% of the estimated amount shown on the preliminary notice. The practical effect of the change is that contractors, subcontractors and suppliers now have a bit more cushion and will not need to file amended preliminary notices as frequently to preserve all of their prospective lien rights. The new legislation expressly provides that the change applies to construction projects for which labor, professional services, materials, machinery, fixtures or tools are first commenced to be furnished on or after December 31, 2019.