Arizona Court of Appeals Division One holds that a homeowner is entitled to “owner-occupant” status under A.R.S. § 33-1002(B) if the homeowner holds “owner-occupant” status when the lien is recorded.

Linda Masaryk obtained title to a parcel of land in Paradise Valley in 2003, which she recorded with the Maricopa County Recorder.  In 2006, Masaryk hired a construction company to build a home on the parcel.  The construction company contracted with Marco Crane & Rigging, Co. (“Crane”).  Within 20 days of commencing work, Crane served Masaryk with a preliminary twenty-day notice of a lien under A.R.S. § 33-992.01(B).  After several years, and without paying Crane, Masaryk ceased construction.  Crane recorded a mechanic’s lien and sued to foreclose the lien in December 2008.  In February 2010, Masaryk transferred title to the home to a wholly-owned limited liability company and moved into the home on April 15, 2010.  Masaryk remained in the home until October 2011. 

Masaryk filed a motion for summary judgment, arguing that the lien was invalid because she was an “owner-occupant” under A.R.S. § 33-1002.  Crane filed a counter-motion, arguing that because Masaryk transferred the property to a limited liability company, she did not qualify for the status.  The superior court granted Crane’s motion and Masaryk appealed. 

The Court of Appeals explained that § 33-1002(B) prevents a mechanic’s lien from attaching to properties “of a person who became an owner-occupant prior to the construction, alteration, repair or improvement, except by a person having executed in writing a contract directly with the owner-occupant.”  “Owner-occupant” status requires the owner (1) to hold recorded legal title to the dwelling before construction or improvement commences and (2) to reside or intend to reside in the dwelling for 30 days during the twelve-month period following the construction or improvement.  The Court easily determined that Masaryk qualified as an “owner-occupant.”  Masaryk held recorded title to the property when Crane recorded its lien, and she lived in the home for approximately one year after completion.  The Court did not discuss Crane’s argument regarding the limited liability company because the validity of the lien hinged on whether Masaryk was an “owner-occupant” at the time Crane recorded its lien in 2008. 

Judge Howe authored the opinion.  Presiding Judge Orozco and Judge Portley concurred.