In Iowa, liens filed on private property or on funds relating to a public project are known as Mechanic’s Liens. When an Iowa mechanics lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property. Iowa construction liens do not attach to publicly owned property in Iowa. If title to the land is held by the state or a political subdivision thereof, no mechanics’ lien right is afforded. Projects performed by industrial development boards, however, are not considered publicly owned property, and therefore an Iowa mechanics’ lien can be filed on industrial development board property.
As for who is entitled to file an Iowa mechanics lien, contractors, as well as subcontractors, design professionals, sub-subcontractors and material suppliers can file an Iowa construction lien. If a company supplies material to a material supplier, they are not eligible to file an Iowa mechanics lien claim. Note that in Iowa, the claimant need not have a written contract in order to be eligible to file a mechanics lien. Oral contracts are sufficient if the lien claimant has sufficient documentation to show the existence of an agreement or that it performed the work for which it is filing the Iowa mechanics lien.
Prior to filing the actual Iowa mechanics lien, there are certain steps that may need to be followed. Pre-lien notices, also known as preliminary notices, are not required for contractors, but to maximize the enforceability of their Iowa mechanics liens, at the commencement of work on the property, subcontractors should provide written notice to the owner or the person having charge of the property that they are performing work on the property. This notice should also be provided to the construction lender, if its identity can be reasonably determined. Material suppliers without a direct contract with the owner must file service of written notice of intent to claim an Iowa mechanics lien on the owner and construction lender before the supplied material is used in connection with the project.
As for the timing requirements of when an Iowa mechanics lien claim must be filed, that is set forth by statute.
For subcontractors and sub-subcontractors, a written notice of intent to file an Iowa mechanics lien must be served on the Owner and construction lender within four months of the last date the lienor provided materials or services to the Project. Subcontractors, sub-subcontractors and suppliers without a direct contract with the owner must then file a verified statement of lien within four months after the last date the lienor provided materials or services to the Project.
Contractors need to file a verified statement of lien within six months after the last date the lienor provided materials or services to the Project.
Laborers must file a verified statement of lien within 30 days after the last item of work has been furnished.
Filing an Iowa mechanics lien is a great way to collect oustanding receivables because on a private project, the Iowa mechanics’ lien places an encumbrance on the property that makes it difficult to resell or re-finance the property without first removing the lien.
In addition to Iowa mechanics lien claims, LienItNow.com also provides other methods for collecting money that is owed on a construction project. These other services include the provision of Stop Notices and Bond Claims.
A Stop Notice is a notification that has the ability to enhance the effectiveness of a mechanic’s lien. A Stop Notice, or a notice to withhold funds, is sent to the company that is financing or funding the construction funds for a project. Once that company receives the Stop Notice, that company has notice that it should withhold sufficient money to satisfy the stop notice claim. The purpose of the Stop Notice is to provide the lender, financiers or funders of the construction project notice that there is money owed to a contractor, subcontractor or supplier so that an inquiry can be made as to why that money is not being paid.
Bond claims can only be filed on a project where the owner, contractor or subcontractor has obtained a payment bond to ensure that every contractor receives payment for the work performed on the Project. The payment bonds issued by sureties for construction projects have specific timing requirements, but most require claimants to submit claims against the bond within sixty to ninety days from the claimants’ last date of work. Bond claims are as or more effective than a lien claim because the payment bond acts as a guarantee that payment will be made for work properly completed.
For more information on filing an Iowa Construction Lien, an Iowa Mechanics Lien, an Iowa Stop Notice, an Iowa Bond Claim, or an Iowa pre-lien notice, please visit http://www.lienitnow.com/Iowa-faq.asp.