Major clarification of Iowa's mechanics' lien law
Posted on 12/21/2016 at 07:30 AM by John Lande
This blog previously covered the decision from the Iowa Court of Appeals in Standard Water Control Systems, Inc. v. Jones. In that decision, the Iowa Court of Appeals added nuance to one of the significant requirements for contractors who may want to file a mechanics’ lien on residential construction. On December 8, 2016, the Iowa Supreme Court decided not to review the Iowa Court of Appeals’ decision. That means the Iowa Court of Appeals decision is the law of the state.
To understand the impact of the Iowa Court of Appeals’ decision, it is necessary to understand the major changes to Iowa’s mechanics’ lien law in 2013. The 2013 revisions to the law, previously covered by this blog, require a general contractor who is going to work on residential construction to file a commencement notice within 10 days of starting work on the project. If the general contractor does not file the notice, then the general contractor cannot later file a mechanics’ lien. This is an important deadline for general contractors, because they risk giving up the right to file a mechanics’ lien before they even know if they need to file a mechanics’ lien.
The nuance added by Standard Water Control Systems is that a general contractor only has to file the commencement notice if the general contractor has hired or will hire a subcontractor. The result makes life easier for contractors working on residential construction who have a contract directly with the property owner.
However, there are also important questions raised by the ruling. For example, if a contractor realizes part-way through a job that he needs to hire a subcontractor then it is unclear when a contractor is supposed to file a commencement notice.
Contractors should also be careful not to read too much into Standard Water Control Systems. General contractors who have not and will not hire a subcontractor are the only ones who don’t need to file the commencement notice on residential construction. A general contractor is any contractor who has a contract directly with the owner of the property. If you have a contract with anyone other than the property owner then a different set of notice requirements still apply.
The most prudent action for any contractor who does residential construction is to be in the habit of filing a commencement notice within 10 days of starting work. Filing the commencement notice as a routine business practice ensures that contractors don’t forget about jobs where they need to file a notice. Filing the notice also avoids any argument about whether or not a contractor should have filed the commencement notice in case subcontractor gets involved at some point during the project. For questions about filing mechanics’ liens and notices, you can refer to a list of tips previously published on this blog.
The deadlines for filing notices and mechanics’ liens can be complicated and depend on the specific facts of your situation. You should always talk to a lawyer if you have questions about filing a notice or mechanics’ lien.
The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.
- John Lande
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