In Arkansas, if contractors and suppliers do not receive payment on a construction project, they can file a mechanics lien to ensure they get paid. A mechanics lien is a legal instrument that grants the unpaid party a security interest in the property. Understanding Arkansas lien laws is crucial for effectively filing a mechanics lien, as these laws are complex and require careful consideration of various factors.
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 Arkansas mechanics lien law and state-specific rules and regulations.
Here are the rules, requirements, and deadlines necessary for filing an Arkansas mechanics lien.
Key Takeaways
- Eligibility Requirements: Contractors, subcontractors, material suppliers, architects, engineers, surveyors, and others providing labor or materials for construction or repair projects in Arkansas can file a mechanics lien if they have a written contract with the property owner or their agent.
- Filing Deadlines: To maintain lien rights, a Statement of Account and Claim of Lien must be filed with the circuit clerk within 120 days of the claimant’s last substantial work on the project. Missing this deadline forfeits lien rights.
- Notice and Form Requirements: Preliminary notices are required for residential projects before work begins, and a Notice to the Owner and Contractor must be provided within 75 days for commercial projects. The lien must include specific information such as the claim amount, property description, and affidavits of notice, ensuring all statutory requirements are met.
Who Can File an Arkansas Mechanics Lien?
You are qualified for mechanics lien rights Arkansas if you are a lien claimant, such as a contractor, subcontractor, or material supplier, who supplies labor, material fixtures, engines, boilers, or machinery in the construction or repair.
Arkansas law also provides mechanics lien rights to architects, engineers, surveyors, appraisers, abstractors, title insurance agents, or persons providing landscaping services or supplies if under a written contract with the owner or owner’s agent.
Can an Unlicensed Contractor File an Arkansas Mechanics Lien?
No, the Arkansas mechanics lien statutes do not explicitly state that a license is required to file a lien. However, contractor licensing laws and related case law imply that a license may be necessary for filing a construction lien when required.
In Arkansas, a contractor’s license is mandated for contractors and subcontractors if the contract amount exceeds $50,000 for commercial projects and $2,000 for residential projects. Additionally, under Ark. Code §17-25-103, no action can be brought at law or equity to enforce any contract made in violation of this chapter.
Furthermore, Arkansas courts have determined that an enforceable contract is essential to file a mechanics lien, indicating that a license is likely needed to have lien rights in Arkansas. Understanding the requirements for filing a construction lien is crucial for contractors to ensure they can protect their rights and avoid potential legal issues.
When Is the Deadline to File an Arkansas Mechanics Lien?
To maintain lien rights in Arkansas, a Statement of Account and Claim of Lien must be submitted to the circuit clerk in the county where the property is situated within 120 days of the claimant’s final provision of labor or materials for the project. Failing to meet this deadline will result in the forfeiture of lien rights. Additionally, the job site description must be sufficient for identification purposes in the lien notice.
What Information Should Be Included in an Arkansas Mechanics Lien?
The statute governing the contents of a mechanics lien Arkansas claim, Ark. Code §18-44-117, requires minimal information.
However, to ensure the accuracy and completeness of your filing, it’s wise to include additional details:
- Claimant’s information
- Property owner’s information
- Information about the hiring party
- A just and true account of the demand due or owed after allowing all credits
- Description of labor and/or materials provided
- Date of the last provision of labor and/or materials
- Description of the property
- A sworn affidavit of compliance with notice requirements, along with copies of each required notice
- The notice must be delivered to the property owner or their authorized agent
Can Attorney Fees, Collection Costs, or Other Amounts Be Included in the Lien Amount?
Under Arkansas law, a mechanics lien allows for a wide range of recoverable amounts, such as debt, interest, and costs, with the potential inclusion of attorney’s fees. These amounts are determined by the court during an enforcement action, even if they were not listed in the initial lien claim.
Therefore, it is advisable to avoid including additional amounts in the lien claim, as the court may award them if the enforcement action is successful. Additionally, the notice does not need to be provided by the particular lien claimant to enforce their right to a lien.
Moreover, Arkansas law restricts the inclusion of “profits” in a mechanics lien claim. The standard rule is that only the actual costs for labor, materials, services, or work provided can be claimed. Profits are generally excluded, except when there is a fixed-price contract and the entire scope of the contract has been fulfilled.
Does an Arkansas Lien Have Priority Over Pre-Existing Mortgages or Other Construction Loans?
No, Arkansas mechanics liens take precedence over all other previous and subsequent encumbrances attached to the property, except for mortgages and construction loans.
Additionally, all mechanics and materialmen’s liens on a project hold equal priority. Their priority dates back to the time when the construction or improvement initially began. Notifying all potential lien claimants is crucial to establish a valid mechanics lien.
Who Needs to Send a Preliminary Notice on Private Projects in Arkansas?
The requirement for preliminary notice on private projects in Arkansas varies based on the project type.
Pre-Construction Notice
For all residential projects with four or fewer units, an Arkansas Pre-Construction Notice is mandatory. This notice must be provided by the general contractor. If this notice is not given, no liens can be filed against the property. Subcontractors and suppliers can also provide this notice, making it effective for all involved parties. Therefore, to ensure lien rights, it is recommended that all claimants submit their own Pre-Construction Notice rather than depending on others. Property owners may also require contractors to present lien waivers before making final payments.
Notice to Owner & Contractor
For other private construction projects in Arkansas, any party who did not contract directly with the property owner must issue a Notice to Owner & Contractor.
How Should a Preliminary Notice Be Sent in Arkansas?
Pre-Construction Notice
The notice can be delivered through personal service, certified mail with a return receipt requested, or by including it in the prime contract. It’s important to note that if the notice is sent via certified mail, the owner’s signature is not necessary for the notice to be valid.
Notice to Owner & Contractor
A Notice to Owner & Contractor can be served through personal service, certified mail with return receipt requested and delivery restricted to the addressee or their agent, or by any method that provides written, third-party verification of delivery at any location where the recipient has an office, conducts business, or resides.
If the delivery is refused or goes unclaimed, the notice must be immediately sent to the owner by first-class mail. The unopened mail marked unclaimed or refused will serve as proof of service as of the postmark date.
Title insurance agents, alongside contractors and subcontractors, have the right to file a lien against a property if they are not compensated for their services.
Requirements for Filing an Arkansas Mechanics Lien
Arkansas law outlines specific steps that unpaid construction parties must take to file a mechanics lien claim. Understanding the procedural steps for serving notice of the right to file a mechanic’s lien is crucial. Below is a step-by-step guide for filing a mechanics lien in Arkansas.
Lien Rights
You are eligible to file a mechanics lien in Arkansas if you are a contractor, subcontractor, or material supplier providing labor, materials, fixtures, engines, boilers, or machinery for construction or repair on real property. Additionally, mechanics lien rights extend to architects, engineers, surveyors, appraisers, abstractors, title insurance agents, or individuals offering landscaping services or supplies under a written contract with the property owner or their agent.
Filing Deadlines
In Arkansas, a mechanics lien must be filed within 120 days of the last substantial work on the project. The lien claim must be submitted to the circuit clerk of the county where the property is located.
Notice Requirements
For residential projects in Arkansas, a contractor must provide a preliminary notice, known as a Pre-Construction Notice to Owner, before beginning work. Although the general contractor’s notice benefits subcontractors and material suppliers, failure to provide this notice affects their lien rights. Therefore, it is advisable for subcontractors and suppliers to issue their own Pre-Construction Notice to Owner to protect their lien rights.
On commercial projects, lien claimants must provide a Notice to Owner and Contractor within 75 days of last providing work or materials to the project. Additionally, Arkansas lien claimants must issue a Notice of Intent to Lien 10 days before filing a mechanics lien.
Form Requirements
An Arkansas mechanics lien must include the following:
- Claim amount
- Property description
- Affidavit of notice
- Copies of each notice given
Profits cannot be included in the claim amount unless you have a fixed-price contract that has been fully completed. Otherwise, the claim amount should only cover the costs of labor and materials provided.
Enforcing the Lien
A mechanics lien in Arkansas must be enforced within 15 months from the date it was recorded.
How to File a Mechanics Lien in Arkansas?
Mechanics liens are powerful tools for ensuring fair payment for participants in construction projects. While there are numerous ways mechanics liens can help secure your payment, the most crucial point is that they work. Developed by Thomas Jefferson, mechanics liens give the claimant an interest in the improved property, providing a strong incentive for the property owner and other parties in the contracting chain to pay what is owed.
This statutory property right ensures fair payment, allowing construction participants to focus on their work without worrying about receiving their due compensation.
If you’ve decided to file a mechanics lien in Arkansas, this step-by-step guide will walk you through the process. Remember, Arkansas has specific notice and timing requirements that must be met for a mechanics lien to be valid. Filing a mechanics lien can be complicated and time-consuming, but once you’re ready to proceed, follow these steps to begin the lien process.
Ensuring Your Arkansas Mechanics Lien Contains the Right Information
Your Arkansas mechanics lien must include all the required information as specified by state statutes to be valid. Arkansas law is very particular about what must be included in a mechanics lien claim. Missing any required details can invalidate your lien claim. An Arkansas mechanics lien must contain a sworn affidavit of notice, as well as the lien claim itself.
The information required by Arkansas statute §18-44-117 includes:
- A just and true account of the demand due after allowing all credits.
- A correct description of the property to be charged with the lien, verified by affidavit.
- An affidavit of a notice containing a sworn statement of compliance with applicable notice provisions (§§ 18-44-114 – 18-44-116).
- A copy of each applicable notice given under §§ 18-44-114 – 18-44-116.
The clerk will refuse to file a lien that does not include the required affidavits and attachments. Ensure that all necessary details are included to avoid rejection.
How to File an Arkansas Mechanics Lien
Once your lien form is prepared, it’s time to file it with the clerk of the circuit court in the county where the property is located.
Follow these steps:
- Prepare your lien form, ensuring it includes all the required information.
- Prepare the necessary attachments: an invoice or statement showing work done and the amount due, a sworn affidavit of notice, and copies of applicable notices sent.
- Send the lien (and a copy if needed) to the recorder’s office in the relevant recording district by mail, courier, or in person.
- Ensure the lien document meets the appropriate margin and paper size requirements for the county.
- Include the proper recording fees with the lien. Fees can vary, so check with the county recorder’s office.
- Once recorded, obtain a stamped copy of the recorded lien for your records. If mailed, include a self-addressed stamped envelope with return instructions.
Serving Your Arkansas Mechanics Lien and Its Importance
While Arkansas law does not require mechanics liens to be served on the property owner, doing so provides significant benefits. Providing written, third-party verified notice that the lien was recorded can entitle you to attorney’s fees if you need to sue for enforcement and prevail. Promptly notifying the owner can often lead to payment to release the lien, avoiding the need for enforcement action. A lien cannot be established unless the property owner or their authorized agent maintains specific notification.
Filing a mechanics lien in Arkansas is a powerful way to ensure you receive the payment you’ve earned. While the process can be complex, following this guide can help you navigate the steps and protect your lien rights. Remember, a mechanics lien remains effective for 15 months from the date of recording, after which it must be enforced or it becomes invalid. Recording a lien can help ensure fair treatment and prompt payment for your work.
Get in Touch
Filing a mechanics lien in Arkansas is an effective way for contractors and suppliers to secure payment for their work on construction projects. This legal tool grants an unpaid party a security interest in the property, motivating property owners and other parties in the contractual chain to fulfill their payment obligations.
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!
