Mechanics liens are powerful tools that can be used to get participants on construction projects the fair payment they’ve earned.
While there are at least 17 ways mechanics liens help get you paid, the single most important thing to remember is that mechanics liens work. Mechanics liens, a legal remedy originally developed by Thomas Jefferson, give the lien claimant an interest in the improved property itself – which provides a strong incentive to the property owner (and other parties up the contracting chain from the claimant) to pay what is owed. This statutorily provided property right promotes far payment, and empowers construction participants to go get work and not worry about eventual payment of what they have earned and deserve.
If you have decided to go whole-hog and file a mechanics lien in Arkansas, this step-by-step guide (starting in the next paragraph, below) will tell you how to do it, simply. It’s important to remember that Arkansas has notice and timing requirements that need to be met before a valid Arkansas mechanics lien can be filed. And, it can be complicated, time consuming, and frankly, quite a challenge to file a mechanics lien by yourself. But, if you’ve decided a mechanics lien is the way to go to get paid, once you’re ready to file, just follow the steps below to start the lien process.
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Make Sure Your Arkansas Mechanics Lien Is Completed With the Right Information
It is important to make sure that your Arkansas mechanics lien contains all the statutorily required information. Arkansas statutes are very specific in what must be included on and with a mechanics lien claim in order for the claim to be valid – or even recorded at all – so it is crucial to make sure the lien is completed appropriately and the required exhibits are attached to the claim. The failure to do so can invalidate your lien claim. Note that an Arkansas mechanics lien must include an sworn affidavit of notice, as well as the lien claim itself.
Arkansas mechanics liens are interesting in that there are multiple attachments required: a sworn affidavit of notice and copies of all applicable notices sent to the property owner, but the information required to be included on the face of the Arkansas mechanics lien is limited. The required information is set forth by Arkansas statute s. 18-44-117, as follows:
1. A just and true account of the demand due or owing to him or her after allowing all credits;
2. The lien account shall contain a correct description of the property to be charged with the lien, verified by affidavit;
3. The affidavit of notice (containing a sworn statement evidencing compliance with the applicable notice provisions of §§ 18-44-114 –18-44-116;) and
4. A copy of each applicable notice given under §§ 18-44-114 — 18-44-116.;
In Arkansas, it is specifically set forth by statute that “The clerk shall refuse to file a lien account that does not contain the affidavits and attachments required by this section.” So, it pays to make sure that your i’s have been dotted and your t’s crossed.
Also note that Arkansas law restricts a claimant’s ability to claim “profits” in its mechanics lien claim. The general rule is that profits may not be included in a lien claim, and therefore, only the true costs of the labor, materials, services or work furnished can be claimed. There is a single exception allowing profits when the parties have a fixed-price contract and the work of the entire contract is completed.
How To File an Arkansas Mechanics Lien
Now the lien form has been drafted, it’s time to file your Arkansas mechanics lien. Arkansas requires that mechanics liens be recorded with the clerk of the circuit court of the county in which the building, erection, or other improvement to be charged with the lien is situated.
- Prepare your lien form, taking care to include the necessary information as set forth above. If you want a copy of the lien for your files, make a duplicate of the lien form.
- Prepare your attachments:
- Invoice or statement showing work done and amount due
- Sworn affidavit of notice stating that the appropriate notice requirements were complied with
- Copy of the applicable notices sent
- Send your the lien (and copy, if applicable) to recorder’s office in the recording district where the liened property is located (this can be by mail, FedEx, some other carrier, or by physically taking the lien to the recorder’s office yourself or by courier).
– Make sure you have the appropriate margins and paper size on the lien document – this can change by county, so it helps to either look up recording requirements online via the clerk of court’s website, or through calling the applicable office to ask.
– If you have decided to personally deliver the lien for recording, or if you mail/FedEx the lien to the appropriate county, the proper recording fees must be included with the lien. Counties often reject liens for improper fees, which could possibly result in a missed deadline, if the lien must be resubmitted. Recording fees can be determined by calling the county recorder, checking on the clerks office’s website, or asking in person if you physically bring the lien for filing. Recording fees are generally one set price for the first page, and a smaller additional price for each additional page thereafter. Arkansas collects an additional $3.00 from the lien claimant for filing and abstracting.
- Once the document is recorded, a stamped copy of the recorded lien can be obtained for your records if you provided an additional copy to the recorder’s office.
– Note that if you mailed your lien to the county for recording, rather than physically taking it in or using an electronic recording service (if applicable) you will not only need to include a) the proper fees for recording with the document; you will also need to include b) a self-addressed stamped envelope with return instructions if you wish to receive a copy of the recorded lien for your records.
- Arkansas law does not necessarily require that a mechanics lien be served on the owner of the liened property – but it provides additional benefits (as well as providing notice of the lien to prompt payment).
For the additional $3.00 collected by the clerk of court, Arkansas requires the clerk of the circuit court to endorse upon every lien the date of its filing and to make an abstract containing:
(i) The date of the filing;
(ii) The name of the person laying or imposing the lien;
(iii) The amount of the lien;
(iv) The name of the person against whose property the lien is filed; and
(v) A description of the property to be charged with the lien.
How to Serve Your Arkansas Mechanics Lien, and Why
As noted above, Arkansas does not specifically require that mechanics liens be served after recording in order for the lien to be valid.
However, there are significant benefits to sending notice that the lien was recorded to the property owner. If notice that the lien was recorded is provided to the property owner by means that provides written, third-party verification of delivery and the lien claim has not been paid within twenty (20) days from the date of service of the notice – the lien claimant is entitled to attorneys’ fees if s/he is required to sue for the enforcement of his or her claim, and is the prevailing party.
Further, not providing notice is likely not the most effective way to get you paid. Since the purpose of filing the mechanics liens is to get you paid what you deserve, giving the owner prompt notice of the lien’s filing will likely further that goal. Waiting until either the owner learns about the lien on his own, or until you initiate a suit to enforce the lien is counter-productive. In many cases, knowledge of the lien can prompt payment in consideration for getting the lien released, and enforcement of the lien never becomes necessary.
Congratulations! Once the lien document has been filed – your Arkansas mechanics is lien ready to get you paid what you’ve earned. And, once it has been served on the property owner and payment remains outstanding for 20 days, you are entitled to any attorneys’ fees you may incur in enforcement if you prevail. While this is a powerful tool to get you paid – it is not necessarily a panacea. It is still possible for the lien to be challenged, or even determined invalid, and it is still possible that it may take a long time to get paid. Remember that just because a lien is recorded doesn’t necessarily make it valid, and likewise, just because a property owner (or their attorney) may make a claim that it is improper and needs to be removed doesn’t make it invalid.
Finally, remember an Arkansas mechanics liens generally stays effective for 15 months from the date on which it was recorded – but after that period expires the lien cannot be extended and is rendered ineffective if an action to enforce has not been initiated.
Recording a mechanics lien can be a powerful tool in making sure you are paid what you earned. The How-To guide above can empower you to take that step when and if it becomes necessary, and make sure you are treated fairly.