A.R.S. 33-995: Your Contractor Must Defend a Sub's Lien

If a subcontractor or supplier you never hired records a lien on your home and files suit, Arizona law does not leave you to fight it alone. A.R.S. 33-995 makes your general contractor defend that lawsuit, because the contractor is the party who took your money and was supposed to pay the people below them. It also gives you a direct way to make the contractor, not you, absorb the cost.

Who has to defend the lien lawsuit

Your general contractor does, whenever the lien comes from someone who is not itself a contractor. That means the subcontractors, material suppliers, and equipment lessors working under your builder. The statute states the duty plainly:

When a lien is recorded or notice given by any person other than a contractor, the contractor shall defend any action brought thereon.

A mechanics lien filed by a sub or supplier is really a symptom of a payment your general contractor collected but did not pass down. So the law hands the defense of that lawsuit to the contractor you did hire, not to you. You are not required to fund the fight or hire your own lawyer to answer a claim that your builder created.

How you make the contractor pay, not yourself

You get two money tools, depending on whether you still owe your builder anything. While the sub's foreclosure suit is pending, you can hold back the amount being claimed:

During pendency of such action the owner may withhold the amount sued for, and if judgment is given upon the lien, he may deduct from any amount due or to become due from him to the contractor the amount of the judgment and costs.

If money is still left on the contract, you withhold the sum the sub is suing for, and if the sub wins, you deduct that judgment plus court costs from the contractor's remaining balance. If you already paid the contractor in full, you can instead recover back from the contractor whatever you were forced to pay to clear the lien, since the contractor was the party originally liable. The section also lets a court award the winning side its reasonable expenses, including attorney fees, so a builder who forces a pointless fight risks paying for it.

What this looks like on a real build

For example, say you are building in Fountain Hills and your general contractor bills a $22,000 draw that covers the plumbing. You pay it. The contractor never pays the plumbing sub, and the sub records a $22,000 lien and sues to foreclose. Under 33-995, your contractor must step in and defend that suit. If you still have $40,000 left on the contract, you withhold the $22,000 the sub is claiming, and if the sub wins, you subtract the judgment and costs from the builder's remaining balance. If the job was already paid off, you turn around and collect the $22,000 back from the contractor. Either way, the unpaid-sub problem lands where it belongs.

Where this sits among your lien defenses

This section works next to your other homeowner protections. The proactive version, where you formally hold back money to cover potential liens, is A.R.S. 33-994. If you are a true owner-occupant, a sub with no direct written contract may have no valid lien at all under A.R.S. 33-1002. The lien right itself starts under A.R.S. 33-981, and it can only become a forced sale through the court process in A.R.S. 33-997. For the practical playbook when a sub liens your home after you paid the builder, see can a subcontractor put a lien on my house if I already paid the builder.

Full text and source

The duty to defend and the owner's deduction and recovery rights are spelled out at View A.R.S. 33-995 on azleg.gov.

The protection in 33-995 only bites when there is contract money left to deduct from, or a solvent contractor to collect back from. That is why the real safeguard is releasing funds on a draw schedule and holding retention until each sub signs a lien waiver, so a defended lien never outruns the money you still control.