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Construction Law

Court Rescinds Order Barring Lien Service Companies from Signing Lien Documents

Arizona lien services may continue to sign Preliminary 20-Day Notices and Mechanics' Liens on behalf of contractors, pending "public comment"

On December 6, 2012, the Arizona Supreme Court rescinded its November 21, 2012, order that barred lien service companies from signing lien documents for its customers.

As a result of the new order (Administrative Order 2012-94), it is "business as usual" for contractors and for the lien service companies that prepare, sign, file, record and arrange for service of legal forms on their behalf.

"Unintended Consequences"

In the wake of the November 21 order, the Certification and Licensing Division of the Administrative Office of the Courts, which supervises the activities of Legal Document Preparers (such as lien service companies), advised the Supreme Court that the November 21 order "may unintentionally prohibit Legal Document Preparers from executing Preliminary 20-Day Notices."

The primary intent of the order was to prevent document preparers from executing lien documents on behalf of homeowner associations. The Court noted in its December 6 order that "the current wording of the amendment has caused unintended consequences," presumably referring to the spillover effect on construction and other industries.

Stating that "it is desirable to receive further comment before adopting the exact wording," the Court's December 6 order:

  • rescinded the November 21 order;

  • instructed the Certification and Licensing Division (CLD) to continue to allow Legal Document Preparers to "draft, execute or serve 20-Day Notices" and "to execute liens"; and

  • instructed the CLD to solicit public comment through January 15, 2013.