Source: https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/
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Arkansas Mechanics Lien Law in Construction - FAQs, Forms, & Resources
Arkansas Mechanics Lien Guide and FAQs
File Your Arkansas Mechanics Lien & Get Paid!
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Arkansas Mechanics Lien Overview
Notice of Intent to Lien required 10 days before filing a lien. On Residential Projects, a Pre-Construction Notice to Owner required before work. On other projects, Notice to Owner and Contractor within 75 days of last furnishing work and materials.
Must be filed within 120 days after last furnishing labor/materials.
In Arkansas, an action to enforce a mechanics lien must be initiated within 15 months after the lien was filed.
View All FAQs View Arkansas Mechanics Lien Forms
Contractors & suppliers have strong lien rights in Arkansas. If a contractor or supplier isn’t paid on an Arkansas job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed. Here are 5 essential things you need to know about Arkansas’s mechanics lien law.
1) Preliminary Notice Is Necessary
On a residential project, a contractor is required to provide a Pre-Construction Notice to Owner prior to starting work. While the general contractor’s notice to owner works to the benefit of the sub-contractors and material suppliers, his failure to give the required notice affects their lien rights. It is prudent, then, for subcontractors and material suppliers to provide their own Pre-Construction Notice to Owner to safeguard their lien rights.
Lien claimants on commercial projects are required to provide a Notice to Owner and Contractor within 75 days of last providing work or materials to the project.
Also, a lien claimant is required to give a Notice of Intent to Lien 10 days prior to filing a mechanics lien, as discussed below.
2) Your Deadlines to File and Foreclose on an Arkansas Mechanics Lien are Fixed
A Statement of Account and Claim of Lien must be filed with the circuit clerk of the county in which the property is located within 120 days of last “substantial” work on the project. Arkansas law requires that a mechanic’s lien be enforced within 15 months of the date the lien was recorded.
3) Know Who Can File an Arkansas Mechanics Lien
You are qualified to file a mechanic’s lien in Arkansas if you are a contractor, subcontractor, or material supplier, who supplies labor, material fixtures, engines, boilers, or machinery in construction or repair of an improvement on real property. Also, Arkansas law provides mechanic’s lien rights to architects, engineers, surveyor, appraiser, abstractor, title insurance agent, or person providing landscaping services or supplies if under a written contract with the owner or owner’s agent.
4) Notice of Intent to Lien is Mandatory Before Filing an Arkansas Mechanics Lien
Do not assume that once you send preliminary notice you’re set.
Separate from the above notice requirements, a potential lien claimant must provide the property owner with a Notice of Intent to Lien before the can file an Arkansas mechanics lien. These two notices should not be confused, and the Notice of Intent must be delivered 10 days prior to filing an Arkansas mechanics lien.
5) An Arkansas Mechanics Lien Can Only Sometimes Include Profits
An Arkansas mechanics lien claim must be stripped to simply the costs of the labor and/or materials furnished. Any and all profits cannot be included in the lien claim except under one circumstance: You are engaged in a fixed price contract and you have completed the contract.
Contractors, suppliers, property owners, construction lenders, and other vendors will encounter all kinds of lien-related paperwork and questions when working on Arkansas construction jobs. Here are some of the common issues you may encounter, and answers written by construction attorneys and payment experts.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-who-can-file-an-arkansas-mechanics-lien
Who can file an Arkansas Mechanics Lien?
You are qualified to file a mechanics lien in Arkansas if you are a contractor, subcontractor, or material supplier, who supplies labor, material fixtures, engines, boilers, or machinery in the construction or repair. Also, Arkansas law provides mechanics lien rights to architects, engineers, surveyor, appraiser, abstractor, title insurance agent, or person providing landscaping services or supplies if under a written contract with the owner or owner’s agent.
It is important to note one unique aspects of Arkansas’ mechanics lien laws which can impact a party’s qualification for filing.
The right to file a mechanics lien in Arkansas requires an “enforceable contract.” This doesn’t necessarily mean the contract must be written, it just needs to be enforceable. There are some practical problems with oral contracts that may jeopardize their enforceability. For more on this, see this article: Arkansas Mechanics Liens Require Enforceable Contract.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-when-is-the-deadline-to-file-an-arkansas-mechanics-lien
When is the deadline to file an Arkansas Mechanics Lien?
A Statement of Account and Claim of Lien must be filed with the circuit clerk of the county in which the property is located within 120 days of a claimant’s last “substantial” work on the project.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-do-i-need-to-send-notice-the-lien-was-recorded
Yes. After filing, notice of the lien should be mailed to the property owner by registered mail. If the lien amount is not fully paid within 20 days of the date of mailing this notice, attorney’s fees may be awarded in an action to enforce the lien.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-can-i-include-attorneys-fees-collection-costs-or-other-amounts-in-the-lien-total
Arkansas law allows for a broad recovery through a mechanics lien. Amounts that may be recovered include the debt, interest, and costs. Attorney’s fees may also be awarded. However, these amounts are awarded by the court in an enforcement action – and are allowed by the court whether or not the lien creditor included those amounts in the lien. It may, therefore, be advisable to not include any extraneous amounts, to be cautious, as they may be awarded by the court in a successful enforcement action.
Further, 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. This is discussed in more detail in our blog post examining the September 2012 decision Erdman Co. v. Phoenix Land & Acquisition LLC.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-when-is-the-deadline-to-enforce-an-arkansas-mechanics-lien-or-how-long-is-my-lien-effective
When is the deadline to enforce an Arkansas Mechanics Lien, or, how long is my Lien effective?
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-will-my-arkansas-lien-have-priority-over-preexisting-mortgages-or-construction-loans
Will my Arkansas Lien have priority over pre-existing mortgages or construction loans?
An Arkansas mechanics lien has priority over both encumbrances recorded after the mechanics lien, and encumbrances previously existing as long as the previous encumbrance is not for the funding of the construction or improvement. All mechanics liens are of equal priority and relate back to the commencement of the project.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-must-the-arkansas-lien-include-a-legal-property-description
Must the Arkansas Lien include a legal property description?
No. An Arkansas mechanics lien requires a “correct description of the property to be charged with the lien, verified by affidavit.” This does not require a legal description of the property, a description is sufficient if it describes the property to be liened such that it can be reasonably identified.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-must-the-arkansas-lien-be-notarized
Must the Arkansas Lien be notarized?
Yes. A mechanics lien in Arkansas must be notarized to be valid.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-can-i-file-an-arkansas-lien-if-im-unlicensed
Can I file an Arkansas Lien if I'm unlicensed?
Yes. According to Arkansas law, there is no licensing requirement for a person otherwise entitled to a mechanics lien to assert those lien rights.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-can-i-file-an-arkansas-lien-on-a-condominium-project
Can I file an Arkansas Lien on a condominium project?
You may file a lien against a condominium in Arkansas, provided you are a party otherwise allowed to file a mechanics lien.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-who-cancels-the-arkansas-lien-if-when-i-get-paid
Who cancels the Arkansas Lien if/when I get paid?
Once the lien claimant’s claim has been satisfied he is responsible for filing a Release of Lien in the records of the circuit clerk within 10 days after he receives payment. Failure to do so may subject the lien claimant to penalties.
https://www.levelset.com/mechanics-lien/arkansas-lien-law-faqs/#faq-item-what-are-the-lien-waiver-rules
Arkansas does not have statutory lien waiver forms, and therefore, you can use any of the lien waiver forms. Since lien waivers are unregulated, be careful when reviewing and signing lien waivers. See this article: Should You Sign That Lien Waiver? Arkansas state law is unclear or silent about whether contractors and suppliers can waive their lien rights before any work on the project begins. Accordingly, you want to proceed with caution on this subject. You can learn more about such “no lien clauses” at this article: Where Can You Waive Your Lien Rights Before Payment?
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Arkansas Mechanics Lien Statutes
The provisions of Arkansas’ mechanics lien statute that permit the filing of mechanics liens and materialmen’s liens can be found at Arkansas Code 18-44-101 et. seq. The full text of the Arkansas Mechanics Lien Law is provided below, and has been updated as of 2011.
Arkansas' Mechanics Lien Statute
§ 18-44-101. Buildings, Land, or Vessels
§ 18-44-102. Land Subject to Lien
§ 18-44-103. Leases
§ 18-44-104. Liens for Soil or Drain Pipe or Tile
§ 18-44-105. Lien of Architect, Engineer, Surveyor, Appraiser, Landscaper, Abstractor, or title Insurance Agent
§ 18-44-106. “Owner” Defined
§ 18-44-107. Definitions
§ 18-44-108. Refusal to List Parties Doing Work or Furnishing Materials
§ 18-44-109. Unlawful to Use Materials Other Than as Designated
§ 18-44-110. Priorities
§ 18-44-111. Repealed by Acts of 1995, Act 1298, § 8
§ 18-44-113. Assignment of Liens
§ 18-44-114. Notice and Service Generally
§ 18-44-115. Notice to Owner by Contractor
§ 18-44-116. Service on Nonresident or Absconder
§ 18-44-117. Filing of Lien
(A) A sworn statement evidencing compliance with the applicable notice provisions of §§ 18-44-114 –18-44-116; and
§ 18-44-118. Filing of Bond in Contest of Lien
§ 18-44-119. Limitation of Actions
§ 18-44-122. Contents of Complaint
§ 18-44-123. Parties
§ 18-44-124. Claims Against Contractors
§ 18-44-125. Protection and Enforcement Orders
§ 18-44-126. Warning Orders
§ 18-44-127. Judgments
§ 18-44-128. Attorney's Fee
§ 18-44-131. Satisfaction--Entry by Creditors
§ 18-44-132. Criminal Offenses--Fraud
(a) It shall be unlawful for any contractor, subcontractor, or other person who has performed work or furnished materials for the improvement of any property when the work or materials may give rise to a mechanic’s, laborer’s, or materialman’s lien under the laws of this state, this subchapter, §§ 18-44-201–18-44-210, and § 18-44-301–18-44-305, or any other statute providing for a mechanic’s, laborer’s, or materialman’s lien, or the assignee of such person, knowingly to receive payment of the contract price or any portion of it without applying the money so received toward the discharge of any liens known to the person receiving the payment, or properly record it as required by statutes, with the intent thereby to deprive the owner or person so paying the contractor or other person receiving payment of his or her funds without discharging the liens and thereby to defraud the owner or person so paying.
§ 18-44-133. Repealed by Acts of 2009, Act 454, § 6, eff. July 31, 2009
§ 18-44-135. Jointly Owned Property