If anyone is not paid for their service, they can foreclose the property to receive compensation. This is referred to as a lien for labor. To do this, the party should have lien rights. Here is what to know about this matter:
According to Arizona law, "every person who labors or furnishes professional services, materials, machinery, fixtures or tools in the construction, alteration or repair of any building, or other structure or improvement," has a lien on such a building, structure or improvement.
Therefore, if you offer any service to a construction project, you may have lien rights. Accordingly, you can force the sale of the property to get your compensation.
Despite offering your services to a project, a few issues can affect your rights. For example, if you are required to be a licensed contractor in Arizona but don't hold a valid license, you may not have lien rights. Further, if you provide professional services but lack a valid certificate of registration issued according to Title 32, Chapter 1, you may not have lien rights.
Additionally, to enforce a lien for labor rights, any person who provides professional services in a construction project should have a contract with the project owner or any party who has an agreement with the owner, such as the contractor, engineer, or architect.
It's also crucial to send a preliminary notice to the project owner or the party in charge of your payment within the first 20 days of offering your services. Doing this can protect your lien rights.
If you don't receive your payments after working on a construction project, consider legal help to protect your rights.
]]>The purpose of the bonds is to guarantee the payment of subcontractors and suppliers if the contractor doesn’t or can’t pay them. These bonds also protect taxpayer dollars that go toward public projects.
The federal law, which was enacted in 1935, is called the Miller Act. Arizona, like the majority of states, has its own version. It’s referred to as the Little Miller Act.
Claims that are filed when someone takes the contractor to court are called “Little Miller claims.” They’re similar to mechanic’s liens on non-public projects. However, the law aims to ensure that contractors fulfill their obligations on public projects so that these claims aren’t necessary.
A performance bond must cover the contracted amount for the bid. A payment bond must cover the amount contracted to any party that supplies the contractor with materials or labor where payment is due when the project is completed. Both types of bonds must also cover attorney’s fees should a claim have to be filed.
If your business is new to public projects and is required to obtain performance and payment bonds, it’s wise to learn more about the Little Miller Act and these bonds. If you’re providing materials or labor to another party on a public project, it’s also a good idea to understand how the bonds protect you. If you have questions or concerns, having legal guidance can help.
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