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Owner called about a lien...

We put a lien on a property, ends up the property owner is "First Financial" and they said that it is not legal that a lien was filed on the property that the renter had not business signing a contract to have work done on the property...First Financial has called and wants the lien dropped and said they will have the lawyer sue us if not done right away. Is this right?

1 reply

May 9, 2019

I'm sorry to hear that you've had some issues with this project. First, it's worth noting that it's extremely common for a property owner to dispute a mechanics lien filing - regardless of whether there are valid grounds for disputing a lien claim. That idea, and lien challenges in general, are explored here: My Lien Was Challenged - What Do I Do? Anyway, when property is being improved by a tenant (rather than the owner), mechanics lien rights can be tricky. In Iowa, under § 572.5 of the state's lien statute, mechanics lien rights will extend to the extent of the interest of the person who authorized the work. So, if the person who authorized work isn't the title holder to the property, only that person's interest will be lienable (rather than the property title, itself). But, under § 572.6, it appears that some right to lien will persist when the person who authorized work is only a tenant - potentially the tenant's improvement upon the property (rather than the property itself), or the tenant's leasehold interest. Still - where work is authorized by someone other than the owner of the property, a lien against the underlying property itself will generally not be available. For more information on lien limitations where work is provided for a tenant, rather than the owner, this resource provides helpful insight: What Happens to Mechanics Lien Rights If My Project is a Tenant Improvement?

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