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TITLE XIV PROPERTY
SUBTITLE 3 LIENS
CHAPTER 572 MECHANIC’S LIEN
572.1 Definitions and Rules of Construction
| 572.2 Persons Entitled to Lien
572.3 Collateral Security Before Completion of Work
572.4 Security After Completion of Work
572.5 Extent of Lien
572.6 In Case of Leasehold Interest
572.7 In Case of Internal Improvement
572.8 Perfection of Lien
572.9 Time of Filing
572.10 Perfecting Subcontractor’s Lien After Lapse of
Ninety Days
572.11 Extent of Lien Filed After Ninety Days
572.12 Time of Filing Against Railway
572.13 Liability of Owner to Original Contractor
572.14 Liability to Subcontractor After Payment to Original
Contractor
572.15 Discharge of Subcontractor’s Lien ¾ Bond
572.16 Rule of Construction
572.17 Priority of Mechanics’ Liens Between Mechanics
572.18 Priority Over Other Liens ¾ Priority of Certain
Construction Mortgage Liens
572.19 Priority Over Garnishments of the Owner
572.20 Priority as to Buildings Over Prior Liens Upon Land
572.21 Foreclosure of Mechanic’s Lien When Lien on Land
572.22 Record of Claim
572.23 Acknowledgment of Satisfaction of Claim
572.24 Time of Bringing Action - Court
572.25 Place of Bringing Action
572.26 Kinds of Action - Amendment
572.27 Limitation on Action
572.28 Demand for Bringing Suit
572.29 Assignment of Lien
572.30 Action by Subcontractor or Owner Against Contractor
572.31 Co-operative and Condominium Housing
572.32 Attorney Fees
572.33 Requirement of Notification
CODE OF IOWA
TITLE XIV PROPERTY
SUBTITLE 3 LIENS
CHAPTER 572 MECHANIC’S LIEN
572.1 Definitions and Rules of Construction
For the purpose of this chapter:
1. “Building” shall be construed as if followed
by the words “erection, or other improvement upon land”.
2. “Material” shall in addition to its ordinary
meaning embrace and include machinery, fixtures, trees, evergreens,
vines, plants, shrubs, tubers, bulbs, hedges, bushes, sod,
soil, dirt, mulch, peat, fertilizer, fence wire, fence material,
fence posts, tile, and the use of forms, accessories, and
equipment.
3. “Owner” shall include every person for whose
use or benefit any building, erection, or other improvement
is made, having the capacity to contract, including guardians.
4. “Owner-occupied dwelling” means the homestead
of an owner, as defined in section 561.1, and without respect
to the value limitations in section 561.3, and actually occupied
by the owner or the spouse of the owner, or both. “Owner-occupied
dwelling” includes a newly constructed dwelling to be
occupied by the owner as a homestead, or a dwelling that is
under construction and being built by or for an owner who
will occupy the dwelling as a homestead.
5. “Subcontractor” shall include every person
furnishing material or performing labor upon any building,
erection, or other improvement, except those having contracts
therefore directly with the owner, the owner’s agent,
or trustee.
572.2 Persons Entitled to Lien
Every person who shall furnish any material or labor for,
or perform any labor upon, any building or land for improvement,
alteration, or repair thereof, including those engaged in
the construction or repair of any work of internal or external
improvement, and those engaged in grading, sodding, installing
nursery stock, landscaping, sidewalk building, fencing on
any land or lot, by virtue of any contract with the owner,
the owner’s agent, trustee, contractor, or subcontractor
shall have a lien upon such building or improvement, and land
belonging to the owner on which the same is situated or upon
the land or lot so graded, landscaped, fenced, or otherwise
improved, altered, or repaired, to secure payment for material
or labor furnished or labor performed.
572.3 Collateral Security Before Completion
of Work
No person shall be entitled to a mechanic’s lien who,
at the time of making a contract for furnishing material or
performing labor, or during the progress of the work, shall
take any collateral security on such contract.
572.4 Security After Completion of Work
After the completion of such work, the taking of security
of any kind shall not affect the right to establish a mechanic’s
lien unless such new security shall, by express agreement,
be given and received in lieu of such lien.
572.5 Extent of Lien
The entire land upon which any building or improvement is
situated, including that portion not covered therewith, shall
be subject to a mechanic’s lien to the extent of the
interest therein of the person for whose benefit such material
was furnished or labor performed.
572.6
In Case of Leasehold Interest
When the interest of such person is only a leasehold, the
forfeiture of the lease for the nonpayment of rent, or for
noncompliance with any of the other conditions therein, shall
not forfeit or impair the mechanic’s lien upon such
building or improvement; but the same may be sold to satisfy
such lien, and removed by the purchaser within thirty days
after the sale thereof.
572.7
In Case of Internal Improvement
When the lien is for material furnished or labor performed
in the construction, repair, or equipment of any railroad,
canal, viaduct, or other similar improvement, said lien shall
attach to the erections, excavations, embankments, bridges,
roadbeds, rolling stock, and other equipment and to all land
upon which such improvements or property may be situated,
except the easement or right of way.
572.8
Perfection of Lien
A person shall perfect a mechanic’s lien by filing with
the clerk of the district court of the county in which the
building, land, or improvement to be charged with the lien
is situated a verified statement of account of the demand
due the person, after allowing all credits, setting forth:
1. The time when such material was furnished or labor performed,
and when completed.
2. The correct description of the property to be charged with
the lien.
3. The name and last known mailing address of the owner, agent,
or trustee of the property.
Upon the filing of the lien, the clerk of court shall mail
a copy of the lien to the owner, agent, or trustee. If the
statement of the lien consists of more than one page, the
clerk may omit such pages as consist solely of an accounting
of the material furnished or labor performed. In this case,
the clerk shall attach a notification that pages of accounting
were omitted and may be inspected in the clerk’s office.
572.9
Time of Filing
The statement or account required by section 572.8 shall be
filed by a principal contractor or subcontractor within ninety
days from the date on which the last of the material was furnished
or the last of the labor was performed. A failure to file
the statement or account within the ninety-day period does
not defeat the lien, except as otherwise provided in this
chapter.
572.10
Perfecting Subcontractor’s Lien After Lapse of Ninety
Days
After the lapse of the ninety days prescribed in section 572.9,
a subcontractor may perfect a mechanic’s lien by filing
a claim with the clerk of the district court and giving written
notice thereof to the owner, the owner’s agent, or trustee.
Such notice may be served by any person in the manner original
notices are required to be served. If the party to be served,
the party’s agent, or trustee, is out of the county
wherein the property is situated, a return of that fact by
the person charged with making such service shall constitute
sufficient service from and after the time it was filed with
the clerk of the district court.
572.11
Extent of Lien Filed After Ninety Days
Liens perfected under section 572.10 shall be enforced against
the property or upon the bond, if given, by the owner, as
hereinafter provided, only to the extent of the balance due
from the owner to the contractor at the time of the service
of such notice; but if the bond was given by the contractor,
or person contracting with the subcontractor filing the claim
for a lien, such bond shall be enforced to the full extent
of the amount found due the subcontractor.
572.12
Time of Filing Against Railway
Where a lien is claimed upon a railway, the subcontractor
shall have ninety days from the last day of the month in which
such labor was done or material furnished within which to
file the claim therefore.
572.13
Liability of Owner to Original Contractor
1. An owner of a building, land, or improvement upon which
a mechanic’s lien of a subcontractor may be filed, is
not required to pay the original contractor for compensation
for work done or material furnished for the building, land,
or improvement until the expiration of ninety days from the
completion of the building or improvement unless the original
contractor furnishes to the owner one of the following:
a. Receipts and waivers of claims for mechanics’ liens,
signed by all persons who furnished material or performed
labor for the building, land, or improvement.
b. A good and sufficient bond to be approved by the owner,
conditioned that the owner shall be held harmless from any
loss which the owner may sustain by reason of the filing of
mechanics’ liens by subcontractors.
2. An original contractor who enters into a contract for an
owner-occupied dwelling and who has contracted or will contract
with a subcontractor to provide labor or furnish material
for the dwelling shall include the following notice in any
written contract with the owner and shall provide the owner
with a copy of the written contract:
“Persons or companies furnishing labor or materials
for the improvement of real property may enforce a lien upon
the improved property if they are not paid for their contributions,
even if the parties have no direct contractual relationship
with the owner.” If no written contract is entered into
between the original contractor and the dwelling owner, the
original contractor shall, within ten days of commencement
of work on the dwelling, provide written notice to the dwelling
owner stating the name and address of all subcontractors that
the contractor intends to use for the construction and, that
the subcontractors or suppliers may have lien rights in the
event they are not paid for their labor or material used on
this site; and the notice shall be updated as additional subcontractors
and suppliers are used from the names disclosed on earlier
notices.
An original contractor who fails to provide notice under this
section is not entitled to the lien and remedy provided by
this chapter as they pertain to any labor performed or material
furnished by a subcontractor not included in the notice.
572.14 Liability to Subcontractor After Payment to Original
Contractor
1. Except as provided in subsection 2, payment to the original
contractor by the owner of any part or all of the contract
price of the building or improvement before the lapse of the
ninety days allowed by law for the filing of a mechanic’s
lien by a subcontractor, does not relieve the owner from liability
to the subcontractor for the full value of any material furnished
or labor performed upon the building, land, or improvement
if the subcontractor files a lien within the time provided
by law for its filing.
2. In the case of an owner-occupied dwelling, a mechanic’s
lien perfected under this chapter is enforceable only to the
extent of the balance due from the owner to the principal
contractor at the time written notice, in the form specified
in subsection 3, is served on the owner. This notice may be
served by delivering it to the owner or the owner’s
spouse personally, or by mailing it to the owner by certified
mail with restricted delivery and return receipt to the person
mailing the notice, or by personal service as provided in
the rules of civil procedure.
3. The written notice required for purposes of subsection
2 shall contain the name of the owner, the address of the
property charged with the lien, the name, address and telephone
number of the lien claimant, and the following statement:
“The person named in this notice is providing labor
or materials or both in connection with improvements to your
residence or real property. Chapter 572 of the Code of Iowa
may permit the enforcement of a lien against this property
to secure payment for labor and materials supplied. You are
not required to pay more to the person claiming the lien than
the amount of money due from you to the person with whom you
contracted to perform the improvements. You should not make
further payments to your contractor until the contractor presents
you with a waiver of the lien claimed by the person named
in this notice. If you have any questions regarding this notice
you should call the person named in this notice at the phone
number listed in this notice or contact an attorney. You should
obtain answers to your questions before you make any payments
to the contractor.”
572.15 Discharge of Subcontractor’s Lien
- Bond
A mechanic’s lien may be discharged at any time by the
owner, principal contractor, or intermediate subcontractor
filing with the clerk of the district court of the county
in which the property is located a bond in twice the amount
of the sum for which the claim for the lien is filed, with
surety or sureties, to be approved by the clerk, conditioned
for the payment of any sum for which the claimant may obtain
judgment upon the claim. This section applies to any mechanic’s
lien perfected under this chapter that has not been discharged
as of March 21, 1986, as well as any mechanic’s lien
filed on or after March 21, 1986.
572.16
Rule of Construction
Nothing in this chapter shall be construed to require the
owner to pay a greater amount or at an earlier date than is
provided in the owner’s contract with the principal
contractor, unless said owner pays a part or all of the contract
price to the original contractor before the expiration of
the ninety days allowed by law for the filing of a mechanic’s
lien by a subcontractor; provided that in the case of an owner-occupied
dwelling, nothing in this chapter shall be construed to require
the owner to pay a greater amount or at an earlier date than
is provided in the owner’s contract with the principal
contractor, unless the owner pays a part or all of the contract
price to the principal contractor after receipt of notice
under section 572.14, subsection 2.
572.17 Priority of Mechanics’ Liens Between
Mechanics
Mechanics’ liens shall have priority over each other
in the order of the filing of the statements or accounts as
herein provided.
572.18
Priority Over Other Liens - Priority of Certain Construction
Mortgage Liens
Mechanics’ liens shall be preferred to all other liens
which may attach to or upon a building or improvement and
to the land upon which it is situated, except liens of record
prior to the time of the original commencement of the work
or improvements. However, construction mortgage liens shall
be preferred to all mechanics’ liens of claimants who
commenced their particular work or improvement subsequent
to the date of the recording of the construction mortgage
lien. For purposes of this section, a lien is a “construction
mortgage lien” to the extent that it secures loans or
advancements made to directly finance work or improvements
upon the real estate which secures the lien. The rights of
purchasers, encumbrancers, and other persons who acquire interests
in good faith and for a valuable consideration, and without
notice, after the expiration of the time for filing claims
for mechanics’ liens, are prior to the claims of all
contractors or subcontractors who have not, at the dates such
rights and interests were acquired, filed their claims for
such liens.
572.19
Priority Over Garnishments of the Owner
Mechanics’ liens shall take priority of all garnishments
of the owner for the contract debts, whether made prior or
subsequent to the commencement of the furnishing of the material
or performance of the labor, without regard to the date of
filing the claim for such lien.
572.20 Priority as to Buildings Over Prior
Liens Upon Land
Mechanics’ liens, including those for additions, repairs,
and betterments, shall attach to the building or improvement
for which the material or labor was furnished or done, in
preference to any prior lien, encumbrance, or mortgage upon
the land upon which such building or improvement was erected
or situated.
572.21 Foreclosure of Mechanic’s Lien
When Lien on Land
In the foreclosure of a mechanic’s lien when there is
a prior lien, encumbrance, or mortgage upon the land the following
regulations shall govern:
1. Lien on original and independent building or improvement.
If such material was furnished or labor performed in the construction
of an original and independent building or improvement commenced
after the attaching or execution of such prior lien, encumbrance,
or mortgage, the court may, in its discretion, order such
building or improvement to be sold separately under execution,
and the purchaser may remove the same in such reasonable time
as the court may fix. If the court shall find that such building
or improvement should not be sold separately, it shall take
an account of and ascertain the separate values of the land,
and the building or improvement, and order the whole sold,
and distribute the proceeds of such sale so as to secure to
the prior lien, encumbrance, or mortgage priority upon the
land, and to the mechanic’s lien priority upon the building
or improvement.
2. Lien on existing building or improvement for repairs or
additions. If the material furnished or labor performed was
for additions, repairs, or betterments upon any building or
improvement, the court shall take an accounting of the values
before such material was furnished or labor performed, and
the enhanced value caused by such additions, repairs, or betterments;
and upon the sale of the premises, distribute the proceeds
of such sale so as to secure to the prior mortgagee or lienholder
priority upon the land and improvements as they existed prior
to the attaching of the mechanic’s lien, and to the
mechanic’s lienholder priority upon the enhanced value
caused by such additions, repairs, or betterments. In case
the premises do not sell for more than sufficient to pay off
the prior mortgage or other lien, the proceeds shall be applied
on the prior mortgage or other liens.
572.22 Record of Claim
The clerk of the court shall endorse upon every claim for
a mechanic’s lien filed in the clerk’s office
the date and hour of filing and make an abstract thereof in
the mechanic’s lien book kept for that purpose. Said
book shall be properly indexed and shall contain the following
items concerning each claim:
1. The name of the person by whom filed.
2. The date and hour of filing.
3. The amount thereof.
4. The name of the person against whom filed.
5. The description of the property to be charged therewith.
572.23 Acknowledgment of Satisfaction of Claim
When a mechanic’s lien is satisfied by payment of the
claim, the claimant shall acknowledge satisfaction thereof
upon the mechanic’s lien book, or otherwise in writing,
and, if the claimant neglects to do so for thirty days after
demand in writing, the claimant shall forfeit and pay twenty-five
dollars to the owner or contractor, and be liable to any person
injured to the extent of the injury.
572.24
Time of Bringing Action - Court
An action to enforce a mechanic’s lien, or an action
brought upon any bond given in lieu thereof, may be commenced
in the district court after said lien is perfected.
572.25 Place of Bringing Action
An action to enforce a mechanic’s lien shall be brought
in the county in which the property to be affected, or some
part thereof, is situated.
572.26 Kinds of Action - Amendment
An action to enforce a mechanic’s lien shall be by equitable
proceedings, and no other cause of action shall be joined
therewith.
Any lien statement may be amended by leave of court in furtherance
of justice, except as to the amount demanded.
572.27
Limitation on Action
An action to enforce a mechanic’s lien may be brought
within two years from the expiration of the ninety days for
filing the claim as provided in this chapter and not afterwards.
572.28
Demand for Bringing Suit
Upon the written demand of the owner, the owner’s agent,
or contractor, served on the lienholder requiring the lienholder
to commence action to enforce the lien, such action shall
be commenced within thirty days thereafter, or the lien and
all benefits derived therefrom shall be forfeited.
572.29
Assignment of Lien
A mechanic’s lien is assignable, and shall follow the
assignment of the debt for which it is claimed.
572.30 Action by Subcontractor or Owner Against
Contractor
Unless otherwise agreed, a principal contractor who engages
a subcontractor to supply labor or materials or both for improvements,
alterations or repairs to a specific owner-occupied dwelling
shall pay the subcontractor in full for all labor and materials
supplied within thirty days after the date the principal contractor
receives full payment from the owner. If a principal contractor
fails without due cause to pay a subcontractor as required
by this section, the subcontractor, or the owner by subrogation,
may commence an action against the contractor to recover the
amount due. Prior to commencing an action to recover the amount
due, a subcontractor, or the owner by subrogation, shall give
notice of nonpayment of the cost of labor or materials to
the principal contractor paid for the improvement. Notice
of nonpayment must be in writing, delivered in a reasonable
manner, and in terms that reasonably identify the real estate
improved and the nonpayment complained of. In an action to
recover the amount due a subcontractor, or the owner by subrogation,
under this section, the court in addition to actual damages,
shall award a successful plaintiff exemplary damages against
the contractor in an amount not less than one percent and
not exceeding fifteen percent of the amount due the subcontractor,
or the owner by subrogation, for the labor and materials supplied,
unless the principal contractor does one or both of the following,
in which case no exemplary damages shall be awarded:
1. Establishes that all proceeds received from the person
making the payment have been applied to the cost of labor
or material furnished for the improvement.
2. Within fifteen days after receiving notice of nonpayment
the principal contractor gives a bond or makes a deposit with
the clerk of the district court, in an amount not less than
the amount necessary to satisfy the nonpayment for which notice
has been given under this section, and in a form approved
by a judge of the district court, to hold harmless the owner
or person having the improvement made from any claim for payment
of anyone furnishing labor or material for the improvement,
other than the principal contractor.
572.31
Co-operative and Condominium Housing
A lien arising under this chapter as a result of the construction
of an apartment house or apartment building which is owned
on a co-operative basis under chapter 499A, or which is submitted
to a horizontal property regime under chapter 499B, is not
enforceable, notwithstanding any contrary provision of this
chapter, as against the interests of an owner in an owner-occupied
dwelling unit contained in the apartment house or apartment
building acquired in good faith and for valuable consideration,
unless a lien statement specifically describing the dwelling
unit is filed under section 572.8 within the applicable time
period specified in section 572.9, but determined from the
date on which the last of the material was supplied or the
last of the labor was performed in the construction of that
dwelling unit.
572.32 Attorney Fees
In a court action to enforce a mechanic’s lien, if the
plaintiff furnished labor or materials directly to the defendant,
the plaintiff, if successful, shall be awarded reasonable
attorney fees.
572.33 Requirement of Notification
Notwithstanding any provision to the contrary, a claim by
a person furnishing only materials to a subcontractor who
is furnishing only materials shall not be entitled to a lien
under this chapter unless the person furnishing materials
had notified the principal contractor within thirty days of
the furnishing of the materials and the lien claim is supported
by a certified statement that the principal contractor had
been notified within thirty days after the materials were
furnished. This requirement is in addition to all other requirements
of this chapter. |
