Mechanic's Liens(Residential Projects)

2:05 p.m.- 2:35 p.m.

Presented byStephen Marso

Whitfield & Eddy, P.L.C.699 Walnut St., Ste. 2000

Des Moines, IA 50309Phone: 515-288-6041

2016 Construction Law Seminar2016 Construction Law Seminar

Thursday, February 25, 2016

TIMELINE FOR NOTICES, POSTING LIENS, AND FILING LAWSUITS TO

FORECLOSE LIENS

Stephen D. MarsoFebruary 25, 2016ISBA Construction Law Seminar

MECHANIC’S LIENS (RESIDENTIAL PROJECTS)

Timeline for Notices (General Contractors & Owner-Builders)

(SOME Notices ARE Through the Iowa Secretary of State)• Owner Notice (Iowa Code §572.13)

▫ A general contractor must provide the following notice to the owner in writing, in boldface font, and a minimum of 10 point size. This is NOT through the Iowa Secretary of State. “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 state construction 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. The website address and telephone number of Iowa’s mechanic’s notice and lien registry are: www.sos.iowa.gov/mnlr & 888-767-8683.

It is recommended that you include this as a provision in every one of your written contracts with owners.

• Notice of Commencement (Iowa Code §572.13A)▫ Day 0: First date you furnished labor or materials.▫ Day 10: Deadline by which a general contractor or owner-builder must post a

notice of commencement. This IS through the Iowa Secretary of State. ▫ The notice must also be sent to the owner’s address as posted to the mechanic’s

lien registry. If the owner’s address is different than the property address, then the notice must be addressed to the owner and sent to the mailing address provided by the U.S. postal service. It is recommended that you send the notice in a fashion by which you have

written confirmation of the date the owner received the notice, such as certified mail with return receipt requested.

There is no deadline, but send the notice ASAP.

Timeline for Notices (General Contractors & Owner-Builders)

(SOME Notices ARE Through the Iowa Secretary of State)

▫ The notice of commencement must include: The name and address of the owner. The name, address, and telephone number of the general contractor or owner-

builder. The address of the property or a description of the location of the property if

the property cannot be reasonably identified by an address. The legal description that adequately describes the property. The date work commenced. The tax parcel identification number. Any other information prescribed by the administrator pursuant to rule. The county in which the building, land, or improvement to be charged with

the lien is situated. Rule 721—45.4(2)(572). The email address of the person posting or submitting the notice of

commencement of work or the e-mail address of another individual or entity designated to receive electronic correspondence on behalf of this person. Rule 721—45.4(2)(572).

▫ A notice commencement, if there are no related active postings,shall be declared inactive two years after the date it is postedunless it is renewed. (Iowa Code §572.34(12))

Timeline for Notices (General Contractors & Owner-Builders)

(SOME Notices ARE Through the Iowa Secretary of State)

Timeline for Notices (Subcontractors)

(ALL Notices ARE Through the Iowa Secretary of State)• Notice of Commencement (Iowa Code §572.13A)

▫ If the general contractor or owner-builder did not post a notice of commencement, then a subcontractor may post a notice of commencement. There is no deadline, but post it ASAP. The notice must also be sent to the owner’s address as posted to the

mechanic’s lien registry. If the owner’s address is different than the property address, then the notice must be addressed to the owner and sent to the mailing address provided by the U.S. postal service. It is recommended that you send the notice in a fashion by which you

have written confirmation of the date the owner received the notice, such as certified mail with return receipt requested.

There is no deadline, but send it ASAP.

The notice of commencement must include: The name and address of the owner. The name, address, and telephone number of the general contractor or

owner-builder. The address of the property or a description of the location of the

property if the property cannot be reasonably identified by an address. The legal description that adequately describes the property. The date work commenced. The tax parcel identification number.

Timeline for Notices (Subcontractors)

(ALL Notices ARE Through the Iowa Secretary of State)

Any other information prescribed by the administrator pursuant to rule. ▫ The county in which the building, land, or improvement to be

charged with the lien is situated. Rule 721—45.4(2)(572).▫ The e-mail address of the person posting or submitting the notice of

commencement of work or the e-mail address of another individual or entity designated to receive electronic correspondence on behalf of this person. Rule 721—45.4(2)(572).

▫ A notice commencement, if there are no related active postings, shall be declared inactive two years after the date it is posted unless it is renewed. (Iowa Code §572.34(12))

Timeline for Notices (Subcontractors)

(ALL Notices ARE Through the Iowa Secretary of State)

• Preliminary Notice (Iowa Code §572.13B)▫ Subcontractors must post a preliminary notice.

There is no deadline, but post it ASAP. It is also recommended that you deliver the preliminary notice to the

owner, and that you deliver it in a fashion by which you have written confirmation of the date the owner received the preliminary notice, such as certified mail with return receipt requested.

Timeline for Notices (Subcontractors)

(ALL Notices ARE Through the Iowa Secretary of State)

The preliminary notice must include: The name of the owner. The state construction registry number. The name, address, and telephone number of the subcontractor

furnishing the labor, service, equipment, or material. The name and address of the person who contracted with the claimant

for the furnishing of the labor, service, equipment, or material. The name of the general contractor or owner-builder under which the

claimant is performing or will perform the work. The address of the property or a description of the location of the

property if the property cannot be reasonably identified by an address. The legal description that adequately describes the property. The date the material or materials were first furnished or the labor was

first performed. The tax parcel identification number.

Timeline for Notices (Subcontractors)

(ALL Notices ARE Through the Iowa Secretary of State)

Any other information required by the administrator pursuant to rule. ▫ The county in which the building, land, or improvement to be

charged with the lien is situated. Rule 721—45.5(2)(572).▫ The e-mail address of the subcontractor or the e-mail address of

another individual or entity designated to receive electronic correspondence on behalf of the subcontractor. Rule 721—45.5(2)(572).

▫ A preliminary notice that remains posted on the registry for two years after its posting shall be declared inactive unless it is renewed. (Iowa Code §572.34(12))

Timeline for Notices (Subcontractors)

(ALL Notices ARE Through the Iowa Secretary of State)

Timeline for Posting Liens with Iowa Secretary of State(General Contractors and Subcontractors)

• Day 0: Last date you furnished labor or materials.• Day 90: Deadline by which you must post your lien to maintain your priority

against non-mechanic’s lien stakeholders. Iowa Code Section 572.18.▫ Your priority date relates back to the first date you furnished labor or

materials. ▫ If you post your lien within the 90-day priority deadline, then you do not

need to serve the lien on the owner. It is recommended that you serve the lien on the owner anyway. The lien must be personally served in the same manner a lawsuit is served.

Hire a process server or the sheriff to serve the lien. Iowa Code §572.10.

• Day 2 years and 90 days: Deadline by which you must post your lien to protect your lien rights. Iowa Code §572.9.▫ If you post your lien after the 90-day priority deadline but within the 2 years

and 90 day deadline, then your priority date against non-mechanic’s lien stakeholders is the date you personally serve the lien upon the owner. Iowa Code Section 572.11. Also, your lien amount is limited to the amount that the owner owes to the

general contractor or that the owner-builder’s buyer owes to the owner-builder at the time you personally serve your lien. Iowa Code Section 572.11.

▫ If you post your lien after the 90-day priority deadline, then you must serve the lien on the owner. Iowa Code Section 572.10. The lien must be personally served in the same manner a lawsuit is served.

Hire a process server or the sheriff to serve the lien.

Timeline for Posting Liens with Iowa Secretary of State(General Contractors and Subcontractors)

• Contents of lien. (Iowa Code §572.8)▫ The date when such material was first furnished or labor first performed, and

the date on which the last of the material was furnished or the last of the labor was performed.

▫ The legal description that adequately describes the property to be charged with the lien.

▫ The name and last known mailing address of the owner of the property.▫ The address of the property or a description of the location of the property if

the property cannot be reasonably identified by an address.▫ The tax parcel identification number.

Timeline for Posting Liens with Iowa Secretary of State(General Contractors and Subcontractors)

▫ Additional information required by the Iowa Secretary of State. Rule 721—45.6 (572). The name, address and telephone number of the general contractor or

owner-builder. The county in which the building, land, or improvement to be charged

with the lien is situated. The e-mail address of the person posting or submitting the mechanic’s lien

or the e-mail address of another individual or entity designated to receive electronic correspondence on behalf of the person posting the lien.

Timeline for Posting Liens with Iowa Secretary of State(General Contractors and Subcontractors)

Timeline for Filing Lawsuits to Foreclose Liens(General Contractors and Subcontractors)

• Day 0: Last date you furnished labor or materials.• Day 2 years and 90 days: Last date by which you can file a lawsuit to foreclosure

your lien. Iowa Code Section 572.27.

572.13A(1) and 721-45.4(1)572.13A(1) 721-45.4(1)

• Notice of commencement of work – general contractor –owner-builder. A general contractor or owner-builder who has contracted or will contract with a subcontractor to provide labor or furnish material for the property shall post a notice of commencement of work to the mechanics’ notice and lien registry internet site no later than ten days after the commencement of work on the property.

• Posting by general contractor. A general contractor for residential construction shall post a notice of commencement of work to the MNLR within ten days of commencement of work, or the general contractor is not entitled to a lien or remedies provided in Iowa Code chapter 572.