Having a lien placed on your property can be detrimental to the title of the property. A Materialman’s or Mechanics lien will “cloud the title” of the property. This means that the lien will appear in public records. This also means that any lien must be paid off before you, as the homeowner, can sell, refinance, or borrow against the equity on your property.
So, what do you do if someone has tried and /or placed a lien on your property? Luckily, Arkansas Materialman’s and Mechanics Lien Statutes are strictly construed and must be followed exactly as stated in the statute.
There are several steps to placing a lien on your property. If one of these steps was not completed by the person placing the lien, you, as the homeowner, can have it removed and invalidated.
When Was the Work Finally Completed?
In Arkansas, under A.C.A. 18-55-115, a lien claimant only has 120 days to file a lien against someone in which they claim has not paid for their services or materials. This 120-day time limit is calculated from the last day that the lien claimant completed any sort of work on the property. If someone completed work 125 days prior to attempting to file a lien on your property, you can quickly invalidate the lien due to this strictly construed timeline. So, when dealing with any lien claimant, you should always first calculate the timeline to make sure the claimant is within the 120-day time limit. This will be your first defense against a lien being placed on your property.
Did You Receive a Pre-Construction Notice?
Before any work is to begin on your property, the contractor, subcontractor, and/or supplier of materials MUST provide you with a “Pre-Construction Notice.” A.C.A. 18-55-115 states “It shall be the duty of the residential contractor to give the owner, the owner’s authorized agent, or the owner’s registered agent the notice set out in this subsection on behalf of all potential lien claimants before the commencement of work.” The Notice must be given to you verbatim as it is set out in the statute. Normally, it is a requirement that you sign an acknowledgement of this notice as well. This notice is a vital defense against a lien being placed on your property. If you were not provided this notice in your contract, then no lien may be placed on the property. Luckily for you, many contractors are unaware of this requirement, so be sure to check your contract for this notice. No Notice equals No Lien!
Were you Sent a 10 Day Notice?
Another important step in properly placing a lien is sending the homeowner a “Notice of Intent to File a Lien.” This Notice must be sent AT LEAST 10 days before filing a lien. The 10-day notice must contain a description of the property, the identity of the lien claimant, the identity of the person who has failed to pay, and the total amount due. The notice must be given by personal service, certified mail, or through a process server. If you were sent this 10-day notice, check and double check that it contained all the elements stated above. If it did not, you may use this as an argument to invalidate and remove the lien.
Are You Verified?
Within 120 days of the last date of labor or materials supplied, and at least 10 days after furnishing the “Notice of Intent to File a Lien,” any lien claimant MUST file a “Verified Statement of Account and Claim of Lien” with the circuit clerk of the county in which the property is located. The verified statement must be notarized, and MUST contain the following: 1) it must contain the legal description of the property, 2) the amount due, 3) the identity of the property owner, 4) the identity of the lien claimant, and 5) an affidavit of notice. A.C.A. 18-44-117 also states it must contain, “(1)A sworn statement evidencing compliance with the applicable notice provisions of 18-44-114 — 18-44-116; and (2) A copy of each applicable notice given under 18-44-114 — 18-44-116.” The good news for you is the statute goes on to state, “The clerk shall refuse to file a lien account that does not contain the affidavits and attachments required by this section.”
The Take Away
As you can see from above, in Arkansas, placing a Mechanics or Materialman’s Lien on property is not as easy as going to the courthouse and filling out a piece of paper. Several steps must be taken, and several notices must be given in advance. All these steps and notices must be done in a specific manner as well. You, as a homeowner, never want a lien placed on your property. If someone has placed a lien on your property, review all the steps above to make sure the lien claimant was complying. At WH Law, we have helped several homeowners remove erroneously placed liens on their property. Whatever the reason someone has placed or is attempting to place a lien on your property, call us today so we may help you to stop a lien claimant or remove the lien and thus protect the value of your property.