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Lien deadlines and the impact of cessation of labor

On Behalf of | Sep 19, 2023 | Real Estate & Development

One crucial factor to consider in any construction budget is the interruption of labor. In Arizona, if work on a project stops and there is a continuous pause in labor for a period of 60 days, it triggers the commencement of your lien deadline. This means you will need to be aware of this timeline to protect your rights and interests in the project.

What are lien deadlines?

Lien deadlines, also known as mechanic’s lien deadlines or construction lien deadlines, refer to the specific timeframes within which contractors and subcontractors can file a mechanic’s lien on a construction project. A mechanic’s lien is a legal claim they can place on a property to ensure contractors and suppliers receive payment for their work and materials.

Note that in Arizona, this deadline usually starts 120 days after the project completion. However, if the property owner issues a notice of completion, it will trigger the deadline and shorten it to 60 days after filing the notice.

Missing a lien deadline

If contractors or subcontractors miss a lien deadline, it can mean forfeiting their ability to file a mechanic’s lien. This could leave them with limited legal recourse to recover unpaid debts.

However, there are exceptions to this rule.

There are exceptions

The interruption of labor does not automatically start the lien deadline if the following circumstances is the cause:

  • Strike: Labor disputes and strikes are external factors beyond the control of contractors and suppliers. They do not trigger the countdown to a lien deadline.
  • Shortage of materials: Material shortages can significantly hinder progress on a project, and it is only fair that such delays do not affect the ability to file a mechanics lien.
  • Act of God: Natural disasters and Acts of God, such as earthquakes, floods or other unforeseeable events, can also disrupt construction projects. In these cases, if work halts due to such events, the lien deadline will not start ticking. These events are entirely beyond human control, and it is understandable that they can cause significant delays.

While a 60-day cessation of labor typically triggers the lien deadline in Arizona, there are exceptions for specific situations. Understanding these nuances is essential for contractors, subcontractors and suppliers to ensure they receive rightful payments for their work and materials.