Calculate the maximum mechanics' lien amount a subcontractor can claim in Arizona if they were contracted for $25,000, completed $22,000 worth of work, but the general contractor only paid $15,000.
Correct Answer
A) $7,000
The lien amount is limited to the amount earned but unpaid: $22,000 (work completed) minus $15,000 (amount paid) = $7,000.
Why This Is the Correct Answer
$7,000 is correct because Arizona mechanics' lien law limits a subcontractor's lien to the value of work actually performed minus payments already received. The subcontractor completed $22,000 in work and was paid $15,000, leaving $7,000 unpaid and lien-eligible. The original contract amount ($25,000) is irrelevant because the subcontractor did not complete the full scope.
Why the Other Options Are Wrong
Option B: $10,000
$10,000 is incorrect. It appears to be the total contract minus payments ($25,000 − $15,000), but this ignores that only $22,000 of work was actually performed. A lien can only be claimed for work completed, not for unperformed portions of the contract.
Option C: $25,000
$25,000 is the full contract price, not the lien amount. The subcontractor cannot lien for unfinished work. Mechanics' lien rights are tied to the value of labor and materials actually furnished, not the total contracted amount.
Option D: $22,000
$22,000 is the total value of work completed, but it does not account for the $15,000 already paid. A lien secures only the unpaid balance of completed work, not the gross value of all work performed.
Memory Technique
Use the formula: LIEN = EARNED − PAID. Earned = work completed ($22,000). Paid = money received ($15,000). $22,000 − $15,000 = $7,000. The lien is the gap between what you did and what you got.
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A residential contractor completed $45,000 in work and materials. The homeowner paid $35,000 but disputes the remaining $10,000. How long does the contractor have to file a mechanics lien after recording the notice of completion?