When securing your receivables through the Mechanics Lien & Bond Claim process, most often, statutory deadlines are dictated by your first & last furnishing dates and/or completion of the entire project. Typically, the first furnishing date will dictate the deadline for the Notice, whereas the last furnishing date will dictate the Mechanics Lien/Bond Claim and Suit.
First we need to define these important dates.
First Furnishing is the date on which the claimant first provides materials or performs services on a project.
Here are some typical examples of first furnishing:
- if you are providing only materials, the date the materials first arrive on the job site
- if you are providing only labor to the project, the date you first arrive on location
- if you are providing materials and labor to the project, the first date either materials or labor are provided to the job site
Last Furnishing is the date on which the claimant last substantially furnishes materials or performs services on a project.
Here are some examples of questionable last furnishing dates:
- punch list work
The key to last furnishing is that it needs to be substantial.
Completion is the date of fulfillment of prime contract for work of improvement. Note: Completion is typically when the general contract is complete, not necessarily the date your contract is complete.
Acceptance is an official act where entry is made in the government records that a public work under contract is completed and accepted.
Next, we need to see these dates in action.
Example: Let’s say we are furnishing materials to a public project in Arizona. We are shipping our materials over time beginning August 1, 2014 and we anticipate our last furnishing to be October 1, 2014.
Based on our first furnishing date, our Preliminary Notice will be due August 21st, because in Arizona we need to serve the notice upon the prime contractor within 20 days from first furnishing materials or services.
If we aren’t paid in a timely fashion, we may decide to proceed with the Bond Claim. Based on our last furnishing date of October 1st, our Bond Claim should be served by December 30th. In Arizona, we need to serve the bond claim upon the prime contractor within 90 days from last furnishing materials or services.
In the event the Bond Claim doesn’t prompt payment, and we have to proceed with Suit to Enforce the Bond Claim, we would need to proceed with suit by September 30, 2015. In Arizona, file suit to enforce the bond claim after 90 days from last furnishing materials or services, but within 1 year from last furnishing materials or services.
Securing your Mechanics Lien and Bond Claim rights begins the moment you enter into a contract to supply materials and/or labor to a project. Make sure you are familiar with the state statute and make sure you know what deadlines lay ahead. Missing a deadline could mean missing your opportunity to protect and collect.