Thursday, March 14, 2013

Navigating the new mechanic's lien requirements in Iowa.

As discussed in other posts, the State of Iowa imposed new requirements for obtaining and enforcing a mechanic's lien in 2013. These new requirements went into effect at the beginning of 2013. There are different requirements for residential and commercial construction. For residential construction, you have to post notice of commencement of work within 10 days to the secretary of state's website. You also have to furnish the homeowner with the following notice in 10-point font or larger:

"Persons or companies furnishing labor or materials for the improvement of real property may enforce a lien upon the improved property if they are not paid for their contributions, even if the parties have no direct contractual relationship with the owner. The mechanics’ notice and lien registry provides a listing of all persons or companies furnishing labor or materials who have posted a lien or who may post a lien upon the improved property."

Additionally, the contractor must provide the website address for the Mechanic's Notice and Lien Registry (MNLR), so the owner can see who has lien rights on their property in connection with a particular project. Then, if the homeowner does not pay, they know who can file a lien against them. The notice must also provide the toll-free number for the MNLR: 888-767-8683.

Here is the fee schedule for filing to the MNLR in Iowa. The process is slightly different for commercial work. The general contractor must provide to the owner (or the subcontractor to the general contractor) in writing a notice within 30 days of first beginning work with the general contractor's contact information. When you provide this notice, you should make a copy of it just before sending, because it will help support your lien claim in the event you end up in litigation.

For reference, here is the new mechanic's lien form for residential construction. Here is the new mechanic's lien form for commercial construction.

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