Mechanics Lien Struggle is Real

#MechanicsLienStruggleIsReal – When Furnishing to a Private Project in Arkansas

Furnishing to a private project in Arkansas? Make sure you are careful to comply with Arkansas’s mechanic’s lien requirements!
 
To secure a mechanic’s lien on a private commercial project in Arkansas, subcontractors should serve a notice of non-payment upon the owner and prime contractor after last furnishing materials or services, but within 75 days from last furnishing materials or services.
 
If you remain unpaid, you should proceed with the notice of intent to lien at least 10 days prior to filing the lien. And the mechanic’s lien needs to be filed after your last furnishing, but within 120 days from last furnishing. 
 
In Arkansas Construction Law Update: Property Owner’s Right to Attorney’s Fees in Lien Foreclosure Action Affirmed, author Benjamin D. Brenner leads his article with the idiosyncrasies of Arkansas’s mechanic’s lien law. These idiosyncrasies include the different procedures depending on if the project is commercial or residential and whether you are a contractor or subcontractor.
 
Then Brenner describes what I refer to as #MechanicsLienStruggleIsReal (Suppose that will trend on Twitter?).

“The requirements can be ambiguous and sometimes appear contradictory. The result is that there is not always a clear path to perfecting a lien”

However, the ambiguity of mechanic’s liens is not the focus of his article. Brenner’s focus is whether a project owner is entitled to attorney’s fees if the owner successfully defends against a foreclosure action.
 
Quick Synopsis: Owner A owned property > GC served copy of preliminary notice on Party A > the GC filed a lien > Owner A sold property to Owner B > the GC proceeded with suit > Owner B defended suit…Now Owner B wants to recover attorney’s fees.
 
Arkansas statute clearly states that if the owner wins, the owner can collect reasonable attorney’s fees.

18-44-128.  Attorney’s fee.
(b) If the owner is the prevailing party in the action, the court shall allow the owner a reasonable attorney’s fee in addition to any other relief to which the owner may be entitled. A.C.A. § 18-44-128

Per Brenner, the trial court denied Owner B the attorney’s fees because Owner B did not receive a copy of the notice (only Owner A did).
 
Fortunately, the Court of Appeals reversed the trial court’s decision.

“The statute does not limit recovery to those owners who received notice of the intent to file lien, to those who owned at the time the lien was filed, or to those who owned the property before the lawsuit was filed. It applies to an ‘owner’ who is a ‘prevailing party.’”

NCS Blog: 3-in-3 Lien Waivers

What should I be looking for when I’m being asked to sign a waiver? What’s the difference between a lien waiver and a release of lien? Learn the answers to these questions & more when you read this week’s blog post.
 

NCS Infographic: Your Customer Defaults, Fortunately You Filed a UCC

Check out this infographic to learn more about what you should do when you have a security interest & your customer defaults on payment.