Our liberties we prize and
our rights we will maintain
~Iowa state motto
As far as state mottos go, you gotta love Iowa’s, especially for folks in the construction business in the Hawkeye state. Because you see, maintaining rights – mechanics lien rights – is the best way for construction companies to secure their payments and make sure they get paid the money they’ve earned on construction projects.
Payment on construction projects can be a mess – but there are many tools available to help get construction industry participants paid fairly for the work they have done. While mechanics liens are a last resort they are powerful tools that, when used appropriately, can virtually guarantee payment on every project.
Mechanics liens work in at least 17 ways to help get you paid, but which specific way is less important (practically speaking) than the simple fact that mechanics liens work. By giving the lien claimant an interest in the improved property itself – which can even be foreclosed on if necessary to discharge the debt – the property owner and other parties up the contracting chain from the claimant are given a strong incentive to make sure the claimant gets paid.
If payment problems have made it necessary for you to file a mechanics lien in Iowa, this step-by-step guide will tell you how to do it. It’s important to remember that Iowa has specific notice and timing requirements that need to be met before a valid Iowa mechanics lien can be filed.
It’s also worth noting that it can be complicated, time consuming, and frankly, 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 and want to do it alone, just follow the steps below to start the lien process once you’re ready to file.
Make Sure Your Iowa Mechanics Lien Has the Right Information
It is crucial to make sure that your Iowa mechanics lien is completed with the required information. Iowa statutes are specific in what information must be provided on a mechanics lien. Failure to include the proper information may result in you lien eventually being determined invalid, even if it gets recorded.
This would not only be frustrating in terms of lost time and expense, but could result in not being able to recover through the mechanics lien and being forced to look for other methods of recovery (if any are available). In order to avoid that fate, it pays to pay close attention while completing your lien, and to obtain the information necessary.
How Do You File a Preliminary Notice in Iowa?
The information required for an Iowa mechanics lien is set forth by Iowa Code § 572.8., as follows:
- A verified statement of account of the demand due the person, after allowing all credits;
- The date when such material was first furnished or labor first performed;
- The date on which the last of the material was furnished or the last of the labor was performed;
- The legal description that adequately describes the property to be charged with the lien;
- The name and last known mailing address of the owner of the property;
- The address of the property or a description of the location of the property if the property cannot be reasonably identified by an address;
- The tax parcel identification number.
Note that, in Iowa, the municipal address of the property (or a description if it has no address), the legal description of the property, and the tax parcel identification of the property are all required. This is a fairly significant amount of property identification, so it pays to make sure that the property to be charged with the lien is clearly and sufficiently identified, and that all of the required property descriptions match and describe the same property.
Special Note on Iowa Lien Filing Deadline
Iowa has an interesting lien “deadline” in that there are actually multiple deadlines for filing a mechanics lien in the Hawkeye state. If the lien is filed within 90 days of your last furnishing of labor or materials to the project, the lien is a “full-price” lien and fully secures the amount you are owed. However, unlike most states, where missing a lien deadline results in the inability to file a valid lien, Iowa allows for a lien claimant to file a lien during an additional 2-year period. If a lien is filed after 90 days from last furnishing, but within this subsequent 2-year period, the lien may still be effective, but is limited to an “unpaid balance” lien, effective only to the extent that the owner has not yet paid the general contractor.
How To File an Iowa Mechanics Lien
Now the lien form has been drafted, it’s time to get your Iowa mechanics lien filed. Iowa is nearly unique in that it requires that mechanics liens be perfected by posting the lien to the state construction registry internet website.
In order to do so, you will need to create an account (and set up a user name and password) for the state construction registry, at: https://sos.iowa.gov/mnlr/account/signin.aspx
- Prepare your lien form, taking care to include the necessary information as set forth above.
- Prepare your attachments:
- Itemized invoices showing the labor/materials furnished to the project, or
- A summary statement of the account (i.e. summary of what was provided).
- If you contracted with a subcontractor, and the project is NOT a single or two family residential project, there is a separate form titled “Certified Statement of Notification” that must also be provided.
- Since the lien is filed through an online portal, recording is generally fairly quick. You can check back in a day or two to see if your lien has been recorded.
- Iowa law requires that a mechanics lien be served on the owner of the liened property – but, 1) the administrator of the lien registry is generally required to provide the notice (which is sufficient if the lien was filed within the original 90-day period); and 2) the notice requirement changes depending on when the lien was sent.
How to Serve Your Iowa Mechanics Lien
As noted above, Iowa generally does not require any further action from the claimant in order to properly serve the lien on the property owner. Once the lien has been recorded with the online registry, the administrator of the registry “shall mail a copy of the lien to the owner.” Note, however, that if the lien is filed outside of the original 90-day period, such service is not completely sufficient.
In the case that the lien is recorded after the original 90-day period but within the extended 2-year period, the lien must be served on the property owner by “any person in the manner original notices are required to be served.” This means that the lien may be sent to the property owner certified mail return receipt requested.
Congratulations! Once the lien document has been filed (and served where appropriate) – your Iowa mechanics is lien ready to get you paid what you’ve earned. While this is a powerful tool to get you paid – it is not magic. 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 Iowa mechanics lien generally stays effective for (2) years and 90 days after the last date on which labor and/or materials were furnished to the project.
However, note that a property owner may – by written demand – require the lien claimant to initiate the enforcement action within 30 days.
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.
Update on Who Can File an Iowa Mechanics Lien for Tenant Improvements
It’s worth noting that a recent case from the Supreme Court of Iowa has limited the ability for claimants to file lien claims for tenant improvements. When a construction project has been undertaken by someone other than the owner of the property, lien rights generally won’t exist in the underlying land.
This article takes a deeper look: Iowa Mechanics Liens for Tenant Improvements: No Claim on Owner’s Land.