Monday, July 27, 2009

Lien Law Online eLerts 7/27/09 - Arkansas


Arkansas recently passed HB 1594, now Act 454, which amends Arkansas’s mechanic’s and materialmen’s lien statutes. The amendments create more certainty that property owners, particularly residential property owners, will actually receive required statutory lien notices, will provide an enforcement mechanism for contractors failing to provide homeowners with the required pre-construction notice, and provide a quick means for frivolous, improperly filed liens to be removed as a cloud on title. More specifically, the Act:

Clarifies that suppliers of drainage tiles, soil pipes, architects, engineers, surveyors, appraisers, landscapers, abstractors, and title insurance agents must follow the same notice requirements before filing a lien as material suppliers, subcontractors, and general contractors.

Provides that service by mail of the required construction notices is “complete when mailed,” and that service of such notices may also be satisfied by written third-party (e.g. UPS, FedEx) verification of delivery at any place where the owner maintains an office, conducts business, or resides.

Bars a residential contractor from bringing an action to enforce any provision of a residential contract if the contractor fails to give the required pre-construction notice to the homeowner.
Provides subcontractors and material suppliers a way to perfect a lien on a residential project if a residential contractor fails to provide the required pre-construction notice to the homeowner.
Clarifies that a subcontractor is required to provide a 75-day notice in order to perfect a lien on a commercial project.

Allows an owner, material supplier, subcontractor, or anyone interested as mortgagee or trustee in the real estate upon which improvement have been made to file suit in circuit court against a contractor or subcontractor who refuses to provide a correct list of all the parties furnishing materials or labor and the amount owed to each, or who falsely certifies that the owner has received the required preliminary construction notices. The prevailing party will receive a judgment for any damages proximately caused by the violation, costs of the action, and reasonable attorney’s fees.

Changes the amount to “bond off a lien” to the amount of the lien claim, as opposed to twice the amount of the lien claim.

Provides a procedure whereby an owner or contractor may petition the court for an expedited hearing to decide whether a lien claimant properly complied with the notice requirements.

The changes will go into effect on August 1, 2009.

Contributing Author: Allen C. Dobson Esq.
Cross, Gunter, Witherspoon & Galchus, P.C.

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