Bulletin: IA2013001

Date:
February 12, 2013
To:
All Iowa Issuing Offices
RE:
UNDERWRITING - Iowa Mechanics Lien Law Changes

Dear Associates:

Recent legislative changes have significantly affected mechanics liens in Iowa, pursuant to legislation that became effective on January 1, 2013. The relevant statutes can be found at §§572.1 through 572.34, Code of Iowa.

Subsequent to January 1, 2013, mechanics liens will be filed, or posted, in the construction registry maintained by the Iowa Secretary of State, rather than with the Clerk of the District Court. Mechanics liens that were filed prior to January 1, 2013, will remain with the Clerk of the District Court.

The general contractor involved in residential construction must provide to the owner, and post with the Registry, a notice, prior to starting the job. This notice, to be printed in 10-point font or larger, must state:

Persons or companies furnishing labor or materials for the improvement of real Property may enforce a lien upon the improved property if they are not paid for their contributions, even if the parties have no direct contractual relationship with the owner. The state construction registry (www.sos.iowa.gov/mnlr or (1-888-767-8683) provides a listing of all persons or companies furnishing labor or materials who have posted a lien or who may post a lien upon the improved Property.

A general contractor who does not post this notice is not entitled to a lien.

“Residential construction” is defined as “construction on single-family or two-family dwellings occupied or used, or intended to be occupied or used, primarily for residential purposes.”

This excludes construction on commercial property and does not apply to “owner-builders,” who are defined as persons who offer(s) or intend(s) to offer to sell the owner-builder’s property without occupying the structures for a period of more than one year from the date the improvement is substantially completed or abandoned.”

An owner-builder is not entitled to a lien for work performed or contractually obligated to perform prior to transferring title to the buyer.

There are also notices to be posted by a general contractor who is an owner-builder (see definition above), known as a Notice of commencement of work; and a notice to be posted by a subcontractor involved in residential construction.

All notices must be communicated to the property owner.

The notice provisions apply only to material furnished or labor performed after the effective date of January 1, 2013.

What is important to understand is that the Iowa Secretary of State’s mechanics’ notice and lien registry (www.sos.iowa.gov/mnlr) must now be checked along with the records of the District Court of the county in which the property is located. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
MU2010008 Mechanic's Liens Coverage During Construction - Initial Priority if No Commencement (3)
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None