Changes to Iowa Mechanic’s Lien Law in Effect January 2022

Changes to Iowa Mechanic’s Lien Law in Effect January 2022

Iowa Governor, Kim Reynolds, has signed HF 561 into law. The bill contains two key changes to Iowa’s mechanic’s lien law. Though the new statute won’t take effect until January 1, 2022, here’s a quick look at what’s changing.

First Change: Liens Covering Multiple Counties Can be Posted Once to Registry

Iowa is upping its efficiency game. Under the current law, if a mechanic’s lien is filed against parcels that cover multiple counties, the claimant is required to post a lien to the registry for each county. Under the new statute, claimants can file one lien.

This is the amended statute text; the changes are underlined:

Section 1. Section 572.8, subsection 3, Code 2021, is amended to read as follows:

3.A lien perfected under this section shall be limited to the county or counties in which the building, land, or improvement to be charged with the lien is situated. The county or counties identified on the mechanics’ notice and lien registry internet site at the time of posting the required notices pursuant to sections 572.13A and 572.13B shall be the only county or counties in which the building, land, or improvement may be charged with a mechanic’s lien.

Second Change: Can Recover Attorney Fees if Lien is Bonded Off

If you file a mechanic’s lien, the lien is bonded off, and you are the prevailing party, you will be entitled to recovery of attorney fees. Some sources indicated this has been a contested issue among district courts. Fortunately, the new statute clears up any question.

This is the amended statute text; the changes are underlined:

Sec. 2. Section 572.32, Code 2021, is amended to read as follows:

572.32 Attorney fees — remedies.

1.In a court action to enforce a mechanic’s lien, or an action brought upon any bond given in lieu thereof, a prevailing plaintiff may be awarded reasonable attorney fees.

2.In a court action to challenge a mechanic’s lien posted on a residential construction property, or any bond given in lieu thereof, if the person challenging the lien or defending against any action on the bond prevails, the court may award reasonable attorney fees and actual damages. If the court determines that the mechanic’s lien was posted in bad faith or the supporting affidavit was materially false, the court shall award the owner reasonable attorney fees plus an amount not less than five hundred dollars or the amount of the lien, whichever is less.

For Now, Follow Current Statutory Guidelines

Remember, these changes do not go into effect until January 2022. Until then, if you need to file a lien on parcels that cover multiple counties, you should continue to post a lien to the registry for each county where the property is located.

Bonus: Securing Lien Rights in Iowa

For commercial projects, you should serve the preliminary notice upon the prime contractor within 30 days after first furnishing. The mechanic’s lien should be posted to the Mechanics’ Notice and Lien Registry within 90 days from last furnishing and suit should be posted to the registry within 2 years from the 90-day lien filing period or within 30 days from the receipt of a demand to commence suit.

For residential projects, the mechanic’s lien and suit deadlines are the same as commercial projects. However, the preliminary notice requirements are different. Residential projects are considered single- or two-family dwellings occupied/used primarily for residential purposes. For prime contractors, the notice should be served upon the owner, and a Notice of Commencement should be posted to the registry no later than 10 days after commencement of the project. For subcontractors or suppliers, post a preliminary notice on the registry as soon as possible to trap funds and serve a copy of the notice upon the owner. A lien, when later filed, may only include labor or materials provided after the preliminary notice is posted and served. If not posted by the prime contractor or owner-builder, a subcontractor or supplier may post a Notice of Commencement on the registry, after which they may post their preliminary notice.

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