In Iowa, if contractors and suppliers are not paid for their work on a construction project, they can utilize a mechanics lien to secure their payment. A mechanics lien is a legal tool that provides the unpaid party with a security interest in the property, effectively ensuring payment. It is crucial for enforcing payment rights and protecting the financial interests of those involved in the construction industry.
At CRM Lien Services, we specialize in ensuring that you get paid quickly and reliably. We can prepare and file mechanics liens for you, taking into account Iowa mechanics lien law and state-specific rules and regulations.
Here are the essential rules, requirements, and deadlines to follow when filing a mechanics lien in Iowa.
Key Takeaways
- Eligibility for Filing: Contractors and suppliers can file a mechanics lien in Iowa, but it’s uncertain if more remote parties can. Recent rulings limit lien rights for tenant-initiated improvements. Parties without a direct contractual relationship with the property owner may still have lien rights under certain conditions.
- Filing Deadlines: File within 90 days for full protection. Liens filed within two years are valid only if the property owner hasn’t paid the general contractor.
- Property Description Requirements: A detailed legal description, property address, and tax parcel ID are required for a valid lien.
Who Can File an Iowa Mechanics Lien?
In Iowa, individuals who supply labor or materials to the property owner, original contractor, or subcontractor have the right to file a mechanics lien. However, it is still uncertain if more distant parties, such as suppliers to other suppliers, can file a valid mechanics lien.
Moreover, a recent Supreme Court of Iowa decision has significantly limited lien rights on tenant improvements. If a tenant, rather than the property owner, initiates the construction project, mechanics lien rights will not apply to the underlying land itself.
To protect against potential liens, it is crucial to obtain lien waivers from all parties providing labor or materials before making payments. This ensures that the property owner is safeguarded against mechanics’ liens if these parties are not compensated.
What Is the Deadline to File an Iowa Mechanics Lien?
Iowa has unique time requirements for filing a valid mechanics lien.
- To ensure full protection, an Iowa mechanics lien should be filed within 90 days of the last date labor or materials were provided to the project.
- If this 90-day deadline is missed, there is still an opportunity to file a lien for up to two years after the last furnishing date.
A properly completed lien statement is crucial for the enforceability of the lien, ensuring that all legal requirements are met and the interests of property owners are protected.
However, a lien filed after the 90-day period only protects the claimant to the extent that the property owner has not yet paid the general contractor.
Is a Legal Property Description Required for an Iowa Mechanics Lien?
Yes, Iowa mandates a legal description of the property for the mechanics lien, along with the property’s address (or a description of its location if no address exists) and the tax parcel identification number.
In July 2013, Iowa revised its mechanics lien law, changing the requirement from merely a “legal description” to a “legal description adequate to describe the property.” While this seems to set a lower standard, it has yet to be tested in court.
Where Do I File and Record an Iowa Mechanics Lien in the Lien Registry?
Iowa mechanics liens and notices are filed through the Iowa Mechanic’s Notice & Lien Registry online portal.
For detailed legal guidelines on the requirements and regulations for filing a mechanics lien, refer to the relevant Iowa Code chapter.
Is Notice Required After Recording an Iowa Mechanics Lien?
Yes, Iowa requires that the lien be mailed to the property owner.
When the lien is filed through Iowa’s mechanics lien registry website, the administrator is responsible for mailing a copy of the lien to the owner on behalf of the lien claimant. Providing notice helps secure payment by informing all parties of the lien and the need for payment.
Who Cancels the Iowa Mechanics Lien When the Property Owner Receives Payment?
In Iowa, when a mechanics lien claim is paid, the claimant must acknowledge the satisfaction of the lien in the mechanic’s lien book or in writing.
If the claimant fails to acknowledge satisfaction within thirty days after receiving a written demand served personally, they must pay a small penalty and are liable for any damages caused by the failure to acknowledge the satisfaction.
Who Must Send an Iowa Preliminary Notice on Private Projects?
It depends. Notice requirements in Iowa vary based on the type of project and the role of the lien claimant.
For residential projects (1-2 family dwellings):
- Notice to Owner: A prime contractor must provide this notice on residential projects.
- Notice of Lien Rights: All subcontractors on residential projects are required to send this notice.
For commercial projects:
- Sub-Subcontractor Notice: All parties providing labor, materials, or services to subcontractors must send this notice on commercial projects.
Do Subcontractors and Suppliers Need to File a Notice of Commencement in Iowa?
Generally, no. The Notice of Commencement requirement in Iowa typically applies to the general contractor (GC) or owner-developer. However, subcontractors and suppliers are required to post a preliminary notice, which must reference an already-posted notice of commencement.
As a result, a subcontractor or supplier may need to post a notice of commencement themselves to fulfill their preliminary notice obligation. This situation arises if the GC fails to post the notice of commencement within 10 days of starting the work, as allowed by Iowa statutes.
Iowa Mechanics Lien Requirements
Iowa mechanics lien law provides broad coverage, including anyone who performs labor on any building or land for improvement, alteration, or repair. This includes those involved in the construction or repair of internal or external improvements, grading, sodding, installing nursery stock, landscaping, sidewalk building, and fencing under a contract with the owner, the owner’s agent, trustee, contractor, or subcontractor.
Equipment renters and suppliers of off-site materials, if necessary for the delivery of labor or materials, are also eligible for lien rights as long as the work is specified in the contract. However, including architects, engineers, surveyors, and interior designers is ambiguous and remains a gray area. Sub-sub-subcontractors and parties further down the chain do not have lien rights.
Filing Deadlines
In Iowa, the deadline to file a mechanics lien is 90 days from the last furnishing of labor or materials to the project. However, unlike most states, Iowa allows a lien claimant to file after the 90-day period, provided notice is served to the owner. An untimely lien is only effective against the funds that remain unpaid to the general contractor.
Notice Requirements
The requirement to send an Iowa preliminary notice varies based on the project type and contractor role:
- Prime Contractors must provide notice to the property owner on owner-occupied residential projects to identify subcontractors or suppliers.
- Subcontractors and Laborers on owner-occupied residential projects must provide notice to the owner when starting work.
- On non-residential projects, Sub-subcontractors and Material Suppliers must provide notice to the general contractor within 30 days of furnishing materials or services to the project.
Recording Requirements
To perfect a mechanics lien Iowa, it must be filed electronically through the Secretary of State Office Mechanic’s Notice and Lien Registry (MNLR). Preliminary notices can also be filed through this system. When filing through Iowa’s MNLR, claimants will need to provide project information, such as project type (commercial or residential), address, dollar amount owed, and the tax parcel ID number.
Enforcing the Lien
A mechanics lien does not last indefinitely. If unpaid, claimants in Iowa must enforce their lien within 2 years from the date of recording. For larger amounts, enforcement actions may need to be brought in district court, where the procedures and potential outcomes of litigation include adjudication and enforcement of the lien.
How to File a Mechanics Lien in Iowa
Iowa’s state motto is particularly meaningful for those in the construction industry. Maintaining mechanics lien rights is crucial for construction companies to secure their payments and ensure they receive what they’ve earned on their projects. Payment issues can be complex, but many tools, including mechanics liens, can help industry participants get paid fairly. While mechanics liens are often a last resort, they are powerful tools that, when used correctly, can almost guarantee payment.
Mechanics liens are effective because they give the lien claimant an interest in the improved property itself, which can be foreclosed on if necessary to settle the debt. This provides a strong incentive for property owners and other parties up the contracting chain to ensure the claimant gets paid. If you need to file a mechanics lien in Iowa, it’s essential to understand Iowa’s specific notice and timing requirements to file a valid lien.
Filing a mechanics lien can be complicated, time-consuming, and challenging to do on your own. However, if you decide to proceed, follow the steps below to start the lien process once you’re ready to file.
Make Sure Your Iowa Mechanics Lien Has the Right Information
It is crucial to ensure your Iowa mechanics lien is completed with all the required information. Iowa statutes specify what information must be provided on a mechanics lien. Failure to include the proper information may result in the lien being deemed invalid, even if it gets recorded. This could lead to wasted time and expense and might force you to seek other methods of recovery.
The required information for an Iowa mechanics lien includes:
- A verified statement of the demand due, after allowing all credits.
- The date when the material was first furnished or labor first performed.
- The date when the last material was furnished or the last labor performed.
- A legal description that adequately describes the property to be charged with the lien.
- The name and last known mailing address of the property owner.
- The property address or a description of the location if no address exists.
- The tax parcel identification number.
Special Note on Iowa Lien Filing Deadline
Iowa has unique lien filing deadlines. Filing within 90 days of your last furnishing of labor or materials results in a “full-price” lien that fully secures the amount you are owed. However, Iowa allows an additional 2-year period to file a lien after the initial 90 days. A lien filed during this period is limited to an “unpaid balance” lien, effective only to the extent that the owner has not yet paid the general contractor.
How To File an Iowa Mechanics Lien
Once your lien form is prepared, you need to file it electronically through the Iowa Secretary of State Office Mechanic’s Notice and Lien Registry (MNLR).
Here’s how:
- Create an account on the state construction registry website.
- Prepare your lien form with all necessary information.
- Prepare your attachments, such as itemized invoices or a summary statement of the account.
- If contracted with a subcontractor on a non-residential project, provide the “Certified Statement of Notification” form.
Filing through the online portal is quick, and you can check back in a day or two to confirm your lien has been recorded. Iowa law requires the lien to be served on the property owner. If filed within the 90-day period, the registry administrator will provide the notice. If filed after the 90-day period, the lien must be served by certified mail. Challenges to a lien for amounts under $6,500 may need to be brought in small claims court.
How to Serve Your Iowa Mechanics Lien
Generally, no further action is required from the claimant to serve the lien on the property owner. The registry administrator mails a copy of the lien to the owner. If the lien is filed outside the initial 90-day period but within the 2-year extension, it must be served on the property owner by certified mail.
Update on Who Can File an Iowa Mechanics Lien for Tenant Improvements
A recent Supreme Court of Iowa case has limited lien rights for tenant improvements. If a project is undertaken by someone other than the property owner, mechanics lien rights typically do not extend to the underlying land.
Recording a mechanics lien can be a powerful tool to ensure you are paid for your work. This guide provides the necessary steps to file a mechanics lien in Iowa, ensuring you are treated fairly and your rights are protected. Remember, a mechanics lien generally stays effective for two years and 90 days after the last furnishing of labor or materials. If the property owner demands enforcement, you must initiate action within 30 days.
Get in Touch
Navigating the complexities of Iowa’s mechanics lien laws can be challenging, but understanding and leveraging these rules is essential for ensuring you get paid for your work. A mechanics lien is a powerful legal tool that provides a security interest in the property, significantly enhancing your chances of receiving payment.
At CRM Lien Services, we have been serving customers across the country with required reference documentation for lien claims since 1986. We assist property owners in navigating the mechanics lien process, informing them about their rights and responsibilities, including providing notices, securing payment, and releasing mechanic’s liens.
We have a wealth of expertise, are licensed and insured, and have a team of highly knowledgeable document processors. If you’re looking for a straightforward process for filing a mechanics lien, give us a call or shoot us an email.
We would love to work with you and help you lower your risk and get paid fast!
