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Are we still able to file a lien in Iowa if the property in question is sold to a 3rd party

IowaRight to Lien

We have a customer who would like to pay us after he closes on his home, however, there are some states that will not hold a third party responsible for said lien against the property if it is filed. If we did end up filing the lien after the property transfers, would the lien still be effective against a new owner in Iowa?

1 reply

Nov 20, 2018

That's a good question. Generally, a claimant will have the right to lien property they have improved and gone unpaid for as long as the work was authorized by the then-current owner. As long as the lien claimant abides by any and all relevant notice and deadline requirements, typically, the sale of the property will not automatically bar a mechanics lien filing. We discuss that idea further here: What Happens If I Filed My Mechanics Lien After the Property Was Sold? Iowa statute clarifies this a little. Under § 572.18(3), "The rights of purchasers, encumbrancers, and other persons who acquire interests in good faith, for a valuable consideration, and without notice of a lien perfected pursuant to this chapter, are superior to the claims of all general contractors or subcontractors who have perfected their liens more than ninety days after the date on which the last of the claimant’s material was furnished or the last of the claimant’s labor was performed." Thus, it appears that the rights of a new purchaser of the property may limit the ability to lien property that is sold when the filing of such a lien claim occurs beyond 90 days from last furnishing. Of course, the sale of property will always complicate the ability to recover under a lien claim. So, if push comes to shove, filing a lien prior to the sale of property (as long as that lien is valid), will typically protect a claimant much more than waiting to file after the sale of that property. Of course, not all situations are cut and dry, and there are certainly situations where a claimant might not want to file a lien. For more information on other potential options for recovery, beyond filing a lien, this article may be helpful: Don’t Want to File a Mechanics Lien? Here Are 5 Other Options.

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