Arizona Could Simplify 20-Day Notice Filing Requirements with Computerized Registry

Arizona could soon follow in Utah's footsteps by replacing its existing 20-day preliminary notice filing procedures with a central registry system instead. Sources within Arizona's construction community have noted that a rough draft of a bill expected to be introduced in the 2014 legislative session included language that would have Arizona adopt a computerized registry system for providing 20-day notices. Currently, under Arizona state law, as a necessary prerequisite to the validity of any claim of lien, such notice must be provided, in writing, to "the owner or reputed owner, the original contractor or reputed contractor, the construction lender, if any, or reputed construction lender, if any, and the person with whom the claimant has contracted for the purchase of those items."

The push for a registry system is primarily being driven by title companies, according to Michael Holden of Holden Willits PLC in Phoenix. The registry could simplify these companies' efforts to mitigate existing liens when offering refinancing to the owner of a job after it's completed by giving them a central system where they can find all of the 20-day notices filed on a project and identify all potential lien claims on the property. However, a registry system could also benefit contractors and subcontractors by simplifying Arizona's notice filing requirements, which Holden noted have been very stringently interpreted by judiciary. "Over the last several years the courts have really strictly construed the requirements for notices," he said, adding that a registry "would be…a much, much simpler way to send 20-day notices, and it would eliminate a lot of the technical defenses too."

Learn more in the Newsmakers section of NACM's Secured Transaction Services (STS) and check back for updates on any changes to Arizona's lien statutes and filing requirements.

- Jacob Barron, CICP, NACM staff writer

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