Court Rescinds Order Barring Document Signing by Lien Service Companies

December 10, 2012 Sharon B. Shively Construction Law

On December 6, 2012, the Arizona Supreme Court rescinded its November 21 order that prohibited a lien service company from signing notices and liens as an agent of its customer.

For the sake of convenience and organization, many construction companies use lien service companies to prepare their Preliminary Twenty Day Lien Notices and their Notices of Materialman’s and Mechanic’s liens. As common practice, the lien service companies also routinely signed the notices and liens as the “agent” or “authorized agent” of the company.

On November 21, 2012, the Arizona Supreme Court issued Order No. 2012-85, which provided that, effective that date, lien service companies could no longer sign Preliminary Twenty Day Lien Notices or Mechanics’ Liens as a contractor’s agent or authorized representative. The Order was intended to apply to the execution of liens only and not Preliminary Twenty Day Notices. However, as it was drafted it appeared to apply to prohibit lien services from executing Preliminary Twenty Day Notices pursuant to A.R.S. § 33-992.01.

New Order. Because of “unintended consequences” of the Order, on December 6 it was rescinded by the Court (see Administrative Order No. 2012-94). The Court is permitting time for public comment through January 15, 2013, at 5:00 p.m. as to whether Legal Document Preparers should continue to be allowed to draft, execute or serve 20-Day Notices and should be allowed to execute mechanics liens. Comment needs to be in writing, and the Certification and Licensing Division of the Administrative Office of the Courts will be providing notice of the forum for providing public comment.