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Burris & MacOmber, PLLC > Articles > Property Law > Anti-Deficiency Applied to House Under Construction

- Anti-Deficiency Applied to House Under Construction -

In Alliance v Carlson Real Estate Co., the Court of Appeals in Phoenix sided with a developer on a materialman’s lien claim.  The materialman had recorded a lien after not being paid for trusses delivered to a subcontractor on the project. Arizona law requires a lawsuit to enforce a materialman’s lien to be filed within 6 monts of the recording of the lien.  The developer recorded a lien discharge bond and the materialman filed suit on the bond within 90 days thereafter, but more than 6 months after the recording of the lien. The Court of Appeals acknowledged that the Arizona statutes allow a materialman an extra 90 days to substitute a surety on a lien discharge bond for the land owner in the lien foreclosure action.  However, the Court of Appeals pointed out that the additional time assumed that a lien foreclosure action was already pending.  Ultimately, the Court of Appeals ruled that the materialman, having been served with the lien discharge bond, could not wait 6 months plus 90 days to commence the action against the surety company on the lien discharge bond.

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