Under ARS 32-1129, the general contractor must pay subcontractors within 7 working days after receiving payment from the owner. Your subcontract should mirror these statutory deadlines so that late payments automatically trigger the statutory interest and remedies without negotiation.

Arizona does not cap retainage on private contracts; retainage is a matter of contract negotiation. On public works, ARS 34-224 requires release of retention after 50% project completion if the contractor is making satisfactory progress. Your agreement should specify the exact retainage percentage, the release schedule (typically at substantial completion and final completion), and payment of statutory interest on withheld retainage.

While Arizona has not enacted a blanket statutory ban on pay-if-paid clauses, courts and statutes in most states treat "pay-when-paid" as a reasonable timing provision rather than an absolute condition. Check Arizona Revised Statutes Title 33, Chapter 1, Articles 1 and 7 (Arizona Lien Law) and ARS Title 34, Chapter 7, Article 1 (Prompt Payment) for specific restrictions, and make sure your subcontract states that payment from the owner is not an absolute condition precedent to your right to be paid.

Arizona does not require use of statutory lien waiver forms, though ARS 33-1006 provides optional statutory waiver formats. A waiver executed before payment is void unless it clearly states it is conditional on receipt of specific funds. Never sign an unconditional waiver until payment has actually cleared your bank account, and make sure your waiver identifies the specific billing period and amounts to avoid losing lien rights on future work.

Under ARS 32-1157, a construction contract provision requiring a subcontractor to indemnify or hold harmless a contractor against liability for damages arising out of the contractor’s sole negligence is void and unenforceable. Always read the indemnification clause carefully — even in states with anti-indemnity statutes, "broad form" indemnity for joint negligence is typically still enforceable.

Arizona requires recording a lien within 60 days after completion of the building or structure, or 60 days after recording of a Notice of Completion or abandonment. Arizona requires a preliminary 20-day Notice to the owner, contractor, and lender within 20 days of first furnishing labor or materials to preserve lien rights beyond the 20-day period. Send statutory notices by certified mail or another trackable method, keep copies of everything, and calendar the deadlines immediately upon each project’s completion.