IOWA

LIEN LAWS BY STATE
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Code Of Iowa

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.