Under Arizona law, a contractor completes a $35,000 home addition on March 15th. The final payment of $5,000 becomes due April 1st but remains unpaid. If the contractor files a lien on July 20th, what is the status of this lien?
Correct Answer
B) Invalid, filed more than 120 days after completion
The lien was filed 127 days after completion (March 15 to July 20), exceeding the 120-day requirement under A.R.S. 33-981, making it invalid.
Why This Is the Correct Answer
Under A.R.S. 33-981, a contractor must file a mechanics lien within 120 days of project completion. Completion occurred March 15th; 120 days later is July 13th. The lien was filed July 20th — 127 days after completion — making it untimely and therefore invalid.
Why the Other Options Are Wrong
Option A: Invalid, residential liens must be filed within 90 days
The claim that residential liens must be filed within 90 days is incorrect. Arizona's statutory deadline under A.R.S. 33-981 is 120 days from completion, not 90 days.
Option C: Valid, but only if preliminary notice was properly served
While preliminary notice is indeed a requirement for lien rights, the lien here is invalid not because of a preliminary notice defect but because it was filed beyond the 120-day deadline. Timely filing is a threshold requirement regardless of preliminary notice.
Option D: Valid, filed within the 120-day requirement
The lien was not filed within the 120-day requirement. March 15 + 120 days = July 13. The lien was filed July 20 — seven days late — making this statement factually incorrect.
Memory Technique
Count from completion: March 15 → April 15 (30 days) → May 15 (60 days) → June 15 (90 days) → July 13 (120 days). July 20 is past the deadline by 7 days. Use a month-by-month counting method to avoid arithmetic errors on the exam.
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