Late Preliminary Notice on a Finished Custom Home
You are the framing and drywall subcontractor on a custom home, under a $148,000 subcontract with the general contractor. The GC has paid you $90,000. Your crew's last day on site was September 12. The owner occupied the house on October 20, which is also the substantial completion date in the GC's contract. You mailed a 20-day preliminary notice that the owner received on August 30. On November 12 you recorded a mechanic's lien for the full $58,000 balance. The owner's attorney writes that the lien is invalid because the owner already paid the GC in full, and separately that your notice was too late to matter. Meanwhile your foreman tells you the GC's superintendent verbally directed 3,200 sf of additional blocking at $2.00/sf, which was installed and never documented.
1. Is the lien timely, and how much of the $58,000 does it actually secure?
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Timeliness: a lien must be recorded within 120 days after completion of the project. Counting from October 20, the 120th day falls in mid-to-late February. November 12 is comfortably inside the window.
Amount: far less than $58,000. A preliminary notice protects only labor and materials furnished within the 20 days before the notice was received and everything after it. Work you furnished before August 11 is outside the lien. Pull your September billing: if roughly $34,000 of the unpaid balance was earned between August 12 and September 12, that is the lienable figure, plus any retainage withheld on work inside the covered window. The remainder of the $58,000 is an ordinary contract claim against the GC.
Also on the clock: a lien must be enforced by suit within 90 days after recording. That is shorter than the recording deadline you just cleared, and it will arrive first. Calendar it now and confirm actual receipt of the notice - not just the mailing date - because the receipt date sets the coverage window. Delivery of a copy of the recorded lien to the owner and lender should go out promptly.
2. The owner says full payment to the GC kills your lien. Evaluate that defense and the owner's realistic options.
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The defense is not automatic. A mechanic's lien attaches to the owner's real property; paying the GC does not, by itself, wipe a subcontractor's lien off the title. Otherwise no owner would ever have to protect itself.
The owner's real protections are narrower:
- Good-faith payments made before the owner received the preliminary notice. This is precisely why the August 30 receipt date is the pivot. Payments made before that date are largely shielded; payments made after it are exposed, because from that point the owner knew a subcontractor was unpaid and unprotected.
- Withholding under the contract, which most Arizona residential contracts authorize.
- Recording a lien release bond to clear title and let the dispute move to the bond.
- A claim against the GC for breach and indemnity.
So the sequence to establish is: what did the owner pay, and when, relative to August 30? Obtain the lender's draw schedule and the owner's cancelled checks. If most of the money moved before August 30 the owner has a strong argument; if substantial draws were released afterward, the owner bears real risk and has strong incentive to settle.
Frame the answer to the owner's attorney as a request for the payment chronology, not as a legal concession. This is a fact fight, and the facts are in the owner's own files.
3. How do you handle the undocumented $6,400 blocking directive so that you preserve the money without damaging the lien claim?
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First, read your subcontract's changes clause. Nearly every subcontract requires written, signed authorization before extra work proceeds. That clause - not Arizona statute - governs whether you have a contract claim, so start there.
Then build the record, in this order:
- Send written confirmation to the GC and superintendent the same day, describing the location, quantity (3,200 sf), unit rate ($2.00/sf), total ($6,400), the date and the name of the person who gave the direction, and stating you will proceed unless directed otherwise in writing within three days.
- Attach the daily report, photos, delivery tickets, and certified payroll showing the blocking was installed.
- Reference the extra in your next pay application as a separate, clearly identified line - do not bury it in a lump sum.
Do not stop work over a $6,400 dispute. Stopping the whole job would make you the breacher, jeopardize the lien on the undisputed work, and hand the GC a defense to the entire balance.
At closeout, if it is unpaid, fold it into the lien or collection claim with the written confirmation as your proof of authorization. Arizona does not require a writing for a private commercial extra, but without contemporaneous documentation you are arguing credibility against a superintendent who will say he never gave the direction.