What is a mechanic's lien?
- If you make an agreement with someone to do work on your property, that person is a “general contractor.” If that general contractor hires others to do work or provide materials then that person is a “subcontractor”. A general contractor and a subcontractor can put a lien on your property if you do not pay the general contractor or your general contractor does not pay a subcontractor. Every person who furnishes material or labor for any building or land for improvement is able to get a lien to secure payment for the materials or labor performed. A lien is a claim against your property that can allow the person claiming the lien to sell your property or be paid if you sell your property. The lien is not automatic. The general contractor and subcontractor who purchases materials for your property or does work on your property has to file with the mechanics' notice and lien registry to get the lien. The registry can be found at https://sos.iowa.gov/mnlr/index.aspx. A general contractor or subcontractor can get a lien for such work as construction, repairs, sodding, landscaping, or fencing.
- In order to put a lien on your residential property, the general contractor or subcontractor have different specialized filings and notice requirements they must satisfy.
- The general contractor
- Owner notice. If the general contractor hired or will hire subcontractors to perform work, the general contractor must provide you a specific statutory notice. This notice must also contain the internet site address and toll-free phone number of the registry so you can check and confirm whether any liens have been filed against your residence. If a general contractor does not give you the Owners Notice then the general contractor is not entitled to a mechanic’s lien.
- Notice of Commencement of Work. A general contractor who has contracted or will contract with a subcontractor must file notice of commencement of work within 10 days of first furnishing services or materials on the property. The registry will mail you a copy of this filing. This filing will alert you to check the registry for a subcontractor working on your property that you did not directly hire. A general contractor that fails to timely file the notice of commencement of work forfeits a right to have a mechanic’s lien on your property.
- Filing of Mechanic's Lien. The general contractor must file a mechanic's lien with the registry that states the date when material was first and last furnished, legal description of the property, and name and address of the owner of the property and the tax parcel identification number. The statement of account must be filed within 2 years and 90 days of the last date on which work was performed or material was furnished. If a subcontractor is not involved, the registry will mail a copy of the lien to the owner. If the statement of account is not filed with the registry within ninety days from the last time work was performed then the contractor filing the lien has an additional requirement to notify you when the statement of account is filed.
- The subcontractor
- Preliminary Notice. A subcontractor must file a preliminary notice with the registry. The purpose of the preliminary notice is to identify themselves as a subcontractor of your project. The preliminary notice shall contain the owners name, registry number, name and address of subcontractor providing services or materials, name of general contractor, property address, legal description and date materials or services were first furnished. The administrator of the registry will send the owner a copy of the filed preliminary notice. If the general contractor did not file a commencement of work, the subcontractor must do so. The preliminary notice is only effective to create a lien for the amount of the balance due by the owner to the general contractor for all labor and materials furnished by the subcontractor when the preliminary notice is filed. A subcontractor’s failure to file a preliminary notice forfeits their ability to pursue a mechanic’s lien.
- Filing of Mechanic’s Lien. The subcontractor must also file a mechanic’s lien with the registry.
How do I find out if there is a lien on my property?
- You will either receive a notice in the mail from the administrator of the registry, or you will be served personally with the notice. There are certain time limits a contractor must follow. If the contractor files the lien more than 90 days after the date on which the last of the material was delivered or labor was performed, you will have to be personally served with the notice. You will want to pay attention to anything you get in the mail from the administrator of the registry. If you receive notice of a lien on your property, you can call Iowa Legal Aid for advice on how to proceed.
- The lien lasts for two years and 90 days. Any action to enforce a mechanic's lien shall be brought within two years from the expiration of ninety days after the date on which the last of the material was furnished, or the last of the labor was performed.
What do I do if there is a lien on my property?
- Your first option is to satisfy the lien by paying what is owed to the contractor and obtain a release of any filed mechanic’s lien. If you pay without a mechanic’s lien release, keep a record of the payment you make. Then you can make a written demand that the contractor acknowledge satisfaction of the lien to the registry. If it has been thirty days since the written demand and the contractor has not let the registry know the lien has been satisfied, you can file with the registry a copy of the demand for satisfaction and proof of service.
- If you do not agree with the lien, you can challenge a mechanic's lien in court. If the lien is for less than $6,500, you can bring a challenge on your own in small claims court. If the lien is for more than $6,500, you will probably need the help of an attorney to file a challenge in district court.
- If you challenge the lien, you can also bring a claim for money against the contractor, if you believe the contractor owes you any money damages.
- Another way to get the lien off of the property is to make a "demand for bringing suit." This is a demand that the contractor enforce the lien. If the contractor does not bring an action in court to enforce the lien within thirty days, the lien shall be forfeited. You may then post with the registry a copy of the demand and proof of service. This puts everyone on notice of the cancellation of the lien.
- The contractor that put the lien on your house can also file in court to enforce the lien. The court can decide that the house will be sold to pay off the amount owed. If you don't think the contractor did a good job or completed the work, you can object to the amount of money that the contractor claims is owed.
If you have further questions about this process, you can contact Iowa Legal Aid.
Iowa Legal Aid provides help to low-income Iowans.
To apply for help from Iowa Legal Aid:
- Call 800-532-1275.
- Iowans age 60 and over, call 800-992-8161.
- Apply online at iowalegalaid.org
If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer” on the Iowa State Bar Association website iowabar.org. A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.
As you read this information, remember this article is not a substitute for legal advice.