Late Fees on Invoices in Arizona
What Arizona contractors and small businesses need to know about charging late fees, interest rates, prompt payment laws, and mechanics lien deadlines.
Max Interest Rate
1.5% per month (18% per annum) on construction contracts
Small Claims Limit
$3,500
Justice Court (Small Claims Division)
Mechanics Lien Deadline
120 days from completion
Arizona Prompt Payment Act
Arizona Prompt Payment Act, A.R.S. § 32-1129.01 et seq.
Arizona requires progress payments within 14 days of an approved application. Final payment is due within 30 days of completion.
Late fee rules for Arizona invoices
Arizona allows contractual late fees. The Registrar of Contractors can also take action against owners who habitually pay late.
Arizona's default interest rate is 10% per annum. Construction contracts can specify up to 18% per annum (1.5% monthly).
Important disclaimer
This page provides general information about Arizona late fee rules. It is not legal advice. Laws change, and your specific situation may have unique factors. For disputes involving significant amounts, consult a licensed attorney in Arizona.
Demand letters and mechanics liens in Arizona
Arizona does not require a demand letter, but a 10-day demand is customary before filing a lien.
Mechanics lien deadline: 120 days from completion. A 20-day preliminary notice is required to preserve lien rights.
Sample late fee clause for Arizona invoices
“Payment is due within the terms specified above. A late fee of 1.5% per month (1.5% per month (18% per annum) on construction contracts maximum per Arizona law) will be applied to all balances remaining unpaid after the due date. Pursuant to the Arizona Prompt Payment Act (A.R.S. § 32-1129.01), the undersigned reserves all rights to pursue collection including but not limited to mechanics lien filing, small claims action (up to $3,500 in Justice Court (Small Claims Division)), and referral to collections.”
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Start Free TrialFrequently asked questions — Arizona
What is the maximum late fee I can charge on an invoice in Arizona?▾
In Arizona, Arizona's default interest rate is 10% per annum. Construction contracts can specify up to 18% per annum (1.5% monthly). Always disclose late fee terms in your contract or invoice before work begins.
Does Arizona have a prompt payment act?▾
Yes. Arizona requires progress payments within 14 days of an approved application. Final payment is due within 30 days of completion.
What is the small claims court limit in Arizona?▾
The small claims court limit in Arizona is $3,500. Claims are filed in Justice Court (Small Claims Division). You generally do not need an attorney for small claims.
How long do I have to file a mechanics lien in Arizona?▾
In Arizona, 120 days from completion. A 20-day preliminary notice is required to preserve lien rights.
Do I need to send a demand letter before filing a lien in Arizona?▾
Arizona does not require a demand letter, but a 10-day demand is customary before filing a lien.