Frequently Asked Questions - Iowa Mechanics Lien
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What is an Iowa mechanics' lien claim?
Iowa mechanics liens are documents that are filed against a property, essentially making a claim against that property. In the construction context, mechanics liens in Iowa are used when an agreement exists for work to be performed to improve property and the person doing the work is not paid for their services. If a contractor, subcontractor or supplier is owed money for work labor or materials provided for the improvement of an Iowa property, they may be entitled to file a lien on the property. The filing of the Iowa lien on a property will allow the person filing the lien (the lienor), to sell the real estate or to be paid out of proceeds of a sale. A construction lien filed in Iowa also makes it difficult for the owner to finance or refinance a property. Mechanics liens are not automatic: they must be filed with the local recorders office in order to be effective.
Depending on the type of construction project being built, Iowa has different requirements and different types of lien claims. 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.
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Who can file an Iowa mechanics' lien Claim?
Under Iowa statutes, the ability to file a lien on a property is widely available to nearly everyone who provides labor, materials or services on a construction project. Contractors, as well as subcontractors, design professionals, sub-subcontractors and material suppliers can file an Iowa construction lien. Qualifying for a construction lien claim is also a matter of ensuring that all of the requirements set forth in the lien statutes are met, including any prelien notices, Notices to Owner, or registrations on Iowa's lien registry.
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Are pre-lien notices for an Iowa mechanics' lien Claim required?
In order to preserve their lien rights on residential projects, general contractors, or those who have a direct contract with the Owner, must file a "Notice of Commencement" within 10 days of commencement of work on the property. To maximize the enforceability of their Iowa mechanics liens, at the commencement of work on a residential property, subcontractors need to file a preliminary notice. A mechanics lien cannot be filed on residential property unless a prelien notice known as a "Notice to Owner" has been filed. If the general contractor or other person who has a direct contract with the owner has not posted the "Notice of Commencement of Work" before the subcontractor needs to file its Preliminary Notice, then the subcontractor must do so in addition to the Preliminary Notice. For commercial work, anyone performing work for a subcontractor must post a preliminary notice within 30 days from commencement of the work or delivery of materials.
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Can you file an Iowa mechanics' lien Claim without a pre-lien notice?
The filing of a prelien notice to owner or preliminary notice serves several purposes, including allowing the owner to know who is working on its property, and to allow the owner to ensure payment to subcontractors and suppliers. The failure to send a prelien notice to owner or preliminary notice can jeopardize payment. In Iowa, if the property is a residential property, Iowa construction liens cannot be filed without a Notice of Commencement, Notice to Owner or a Preliminary Notice. Preliminary notices or a Notice of Commencement of Work is required for any and all residential properties. Persons or companies supplying labor or materials to a subcontractor on a commercial property must file a prelien notice within 30 days from the date of commencement or delivery of materials.
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When should an Iowa mechanics' lien Claim be filed?
A mechanics lien or statement of account required by the Iowa Mechanics Lien Law shall be posted by a general contractor or subcontractor within two years and ninety days after the date on which the last of the material was furnished or the last of the labor was performed. However, a general contractor or a subcontractor may perfect a mechanic's lien pursuant to Iowa's Mechanics Lien Law beyond ninety days after the date on which the last of the material was furnished or the last of the labor was performed, but Liens perfected after the 90 lapses, they shall be enforced against the property only to the extent of the balance due from the owner to the general contractor or from the owner-builder's buyer to the owner-builder at the time of the service of such notice.
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How much does it cost to file an Iowa mechanics' lien Claim?
LienItNow.com prepares, files and serves Iowa construction liens (which includes a written notice of intent to claim a lien, if necessary, as well as a verified statement of lien) for a fee of $290.00. Pre-lien notices are not included in the $290.00 price, but can be filed for a fee of $50.00.
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Do I need a written contract to file an Iowa mechanics lien claim?
No. Oral contracts are sufficient if you have sufficient documentation to show the existence of an agreement or that you performed the work for which you are filing the Iowa mechanics lien.
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How does filing an Iowa mechanics' lien Claim help me get my money?
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 construction lien.
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What is an Iowa Stop Notice and why should it be filed
LienItNow.com prepares and serves Iowa Stop Notices for a fee of $125.00. 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.
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What is an Iowa Amendment to a mechanics' lien Claim?
LienItNow.com prepares, files and serves Iowa Amendments to mechanics' lien Claims for a fee of $250.00. Amendments to a mechanics' lien claim are often needed when something about the claim changes. Common changes to a lien claim are increases or reductions in the amount due to the lienor, or a change to the last date of work.
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When should an Iowa Discharge of mechanics' lien claim be filed?
LienItNow.com prepares, files and serves Iowa Discharges of mechanics' lien Claims for a fee of $85.00. Once the lienor has been paid the amount contained in its lien claim, or has come to an agreement that requires the lien claim to be removed from the property records, a Discharge of mechanics' lien Claim should be filed.
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How much does it cost to file an Iowa Extension of a mechanics' lien Claim?
LienItNow.com prepares, files and serves extensions of mechanics' lien Claims for a fee of $85.00. All lien claims expire after a certain period of time, and filing an extension of the mechanics' lien claim prolongs the expiration date. Iowa law, however, does not permit an extension of mechanics' lien claims.
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Can I file a Bond Claim on an Iowa Project?
LienItNow.com prepares, files and serves Iowa Bond Claims for a fee of $275.00. 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.
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Do I need to file a Pre-Notice to make a claim against an Iowa payment bond?
LienItNow.com prepares, files and serves Iowa Pre-Notices for bond claims for a fee of $50.00. Depending on the terms of the payment bond, pre-notices may or may not be required. LienItNow.com recommends that, prior to or immediately after starting work or delivering materials to a project, subcontractors and suppliers, file a pre-notice that it is a potential beneficiary of the construction project's bond.
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