Bulletin: AR2025002

Dear Associates:

The following is a summary of legislation that was passed during the 95th General Assembly that may impact the title industry. The following Acts will be effective as of August 4, 2025.

Certificate of Indebtedness from the Department of Finance and Administration Subordinated to Purchase Money Mortgages

HB 1273 / Act 29. This act amends Arkansas Code § 26-18-701 to expressly subordinate the lien interest of any filed Certificate of Indebtedness from the Arkansas Department of Finance and Administration to any filed purchase money mortgage.

What you should know: Previously, the statutory language appeared to create priority of a Certificate of Indebtedness as against any liens or interests filed after the date of filing of the Certificate. The Department of Finance and Administration has never released a written or published opinion on the priority status as against purchase money mortgages used to acquire title to land by a buyer with a pre-existing and filed Certificate. Going forward a true purchase money mortgage will have priority over any Certificate of Indebtedness filed against the buyer/purchaser of the property. The Certificate should still appear as a Schedule B exception in the owner’s policy. If you have any question or concern as to the status of the mortgage as a purchase money mortgage, please contact your Stewart Title Guaranty Company underwriting counsel.

Repeal of the Law Allowing the Set Aside of a Decree to Quiet Title within Three Years of the Decree

SB 298 / Act 320. This act repeals Arkansas Code § 18-60-510 to remove the ability to set aside a decree quieting title within three (3) years of the date of the decree based on a meritorious defense.

What you should know: While this change impacts the general quiet title procedure under Arkansas Code § 18-60-501 et. seq., it does not remove the three (3) year set aside period for a defendant not properly noticed under Arkansas Code § 26-38-206, which is directly tied to suits for confirmation of tax sales under Arkansas Code § 26-38-101 et. seq. That period can be shortened to one (1) year if there is posting on the land of the notice of entry of the decree of confirmation. Keep in mind that Arkansas Code § 18-60-601 et. seq. concerning the procedure for quieting title after a public sale is also not subject to the three (3) year set aside rule. While we now have two possible procedures for quieting title without the prior three (3) year challenge period, we must still review the case documents to confirm that all interested parties were properly noticed prior to insuring title out of the tax deed holder.

Title Agent/Company Access to Public Records Under the Arkansas Title Insurance Act

HB 1367 / Act 346. This act amends the Arkansas Title Insurance Act under Arkansas Code § 23-103-417 to require a city, county, or state government or government official maintaining land records in electronic format or record to provide such instruments in their electronic format within the time requirements of the Arkansas Title Insurance Act to title agents and those affiliated with a title agency and such instruments may not bear any additional notation or watermark. A reasonable fee of $150 or less per month may be charged for providing such instruments. Any instruments not maintained electronically must be mechanically reproduced and provided within the same time frame to any requesting title agent or person affiliated with the title agency.

What you should know: This should address some concerns with local officials denying access to public records or providing electronic copies of instruments with alterations or at unreasonable fees.

Scrivener’s Affidavits by Licensed Engineers, Surveyors, and Notary Publics

HB 1479 / Act 418. This act amends Arkansas Code § 18-12-108 to allow licensed engineers, surveyors, and notary publics to prepare and file scrivener’s affidavits. An engineer or surveyor who prepared the original survey, plat, replat, lot split, boundary line adjustment, or any other instrument affecting title to real property may execute a scrivener’s affidavit. A notary public who witnessed the execution of an original instrument and executed the acknowledgment to said instrument may also prepare a scrivener’s affidavit regarding any error.

What you should know: Keep in mind that while a scrivener’s affidavit may be authorized for these parties, we may need to review the complexity of the issue sought to be corrected or addressed prior to insuring title without exception.

Mechanic’s and Materialmen’s Liens Priority Against Construction Mortgages

HB 1271 / Act 479. This act amends Arkansas Code § 18-44-110 regarding the priority of mechanic’s and materialmen’s liens against construction mortgages and to a certain extent non-construction mortgages. Under the act, any mortgage recorded prior to the visible commencement of labor, work, or supply of materials and fixtures has priority over any lien for such labor or materials or fixtures. If any work has commenced prior to the filing of a construction mortgage, then only the liens for the work or supply occurring prior to the date of filing of the construction mortgage will have priority against said mortgage. A construction mortgage lender or lienholder may conclusively rely on an affidavit of non-commencement from a licensed appraiser, architect, surveyor, or engineer who has inspected the property at a specific time and attested to there being no commencement or supply of materials to the site at the time of their inspection. This affidavit must be filed within four (4) business days before or four (4) business days after the filing of the construction mortgage. If the construction is for a residential structure, the non-commencement affidavit may be executed by an employee or designee of the lender or a licensed title agent. Any party committing fraud by executing a false affidavit will be held liable for any loss or damage to the parties relying on the affidavit.

What you should know: This greatly helps us in our ability to underwrite a transaction involving construction and to be able to provide mechanic’s and materialmen’s lien coverage in the State of Arkansas. Keep in mind that this does not otherwise impact the equal priority given to contractors, subs, laborers, suppliers, etc.… based on visual commencement unless we confirm that there is no broken priority, or we have addressed broken priority prior to filing of the mortgage interest to be insured. The statute does not provide a statutory form of the affidavit regarding non-commencement. Please seek approval from your Stewart Title Guaranty Company underwriting counsel as to the form of any affidavit of non-commencement and as to the identity of the attesting party prior to giving any mechanic’s and materialmen’s lien coverage in a transaction involving construction.

Ownership of Streets and Alleys Abandoned by a City or Town

HB 1272 / Act 520. This act amends Arkansas Code § 14-301-306 regarding ownership of abandoned streets and alleys by abutting landowners at the time of abandonment by the city or town. The act retroactively provides for a conveyance of abutting property following any ordinance abandoning the abutting street or alley to include the respective portion of the street or alley unless an express reservation is made by the abutting owner. If the abandoned street or alley abuts platted real property, then the plat of said property is amended by law to include the respective portion of the street or alley at the time of the ordinance abandoning said street or alley.

What you should know: This act addresses concerns with the failure to expressly describe the portion of the lawfully abandoned street or alley in a subsequent conveyance. These concerns arose when post-ordinance conveyances used the record legal description without reference to the acquired portions of the street or alley lawfully abandoned. As noted, this act is also retroactive and will apply to past conveyances following an ordinance abandoning a town or city’s interest in a street or alley.

Title Agent, Title Insurer, and Title Company Payment of Real Property Taxes in Conjunction with Issuance of Title

HB 1274 / Act 521. This act amends Arkansas Code § 26-35-601 to address existing issues in payment of real property taxes to the county collector during a real estate transaction and issuance of title insurance. The act specifies that a county collector that received a written or electronic request for a statement of all real estate taxes owed for a parcel(s) of land being conveyed and associated personal property taxes must respond in writing or by email within three (3) business days of receiving the request. If they fail to respond within that time, then the collector shall accept payment of the real estate taxes due on the parcel(s) requested without payment of any related personal property taxes.

What you should know: The act effectively creates a payoff request system with the county tax collector. This will address issues revolving around communication with the county tax collectors, who may expect the title agent to collect personal property taxes in addition to the real property taxes. By establishing a procedure for payoff requests, a title agent may avoid customer service concerns or pressure to pay any missed personal property taxes not communicated but expected by the county tax collector.

Grantor Identity Verification Prior to Recordation of Deeds

SB 406 / Act 752. This act amends Arkansas Code § 14-15-403 regarding recording requirements for deeds of conveyance. A deed to real property presented for recording in person or by mail shall not be filed of record unless the grantor named in the deed or the individual signing on behalf of the grantor named in the deed appears in person at the office of the recorder and presents a valid photo identification card or driver’s license. If the deed is presented by mail to the recorder, then the grantor shall include a photocopy of their valid photo identification or driver’s license with the deed presented. The recorder will record a copy of all valid photo identification cards or driver’s licenses by attaching the photocopies to the deed. This requirement will not be applicable to a deed presented by the following: an attorney; real estate broker or real estate agent; representative of a bank, mortgage company, or lending institution; a title insurance agent, title insurance agency, or person affiliated with a title insurance agency; the Commissioner of State Lands; an individual representing the state or a political subdivision of the state; or the state, a municipality within the state, a county within the state, or a political subdivision of the state.

What you should know: The act is an attempt to stop vacant land or abandoned property fraud. This could present problems for grantees under a deed who were delivered the instrument without first recording with the appropriate circuit clerk as they will not be able to record the deed on their own. The form of photo identification required by the act should be issued by a state agency or a United States Government agency.

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

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