Construction Law Update: Two Changes to Mechanic's Lien Statute Take Effect On January 1, 2022
On January 1, 2022, two legislative changes to Iowa’s mechanic’s lien statute at Iowa Code Chapter 572 took effect. The following is a summary of the two changes:
Change #1, to Iowa Code Section 572.8(3): This change allows one lien to cover property spanning more than one county, which eliminates the requirement that separate liens be posted in each county for liened property that spans more than one county. Below is the revised statutory language:
“3. A lien perfected under this section shall be limited to the county or counties in which the building, land, or improvement to be charged with the lien is situated. The county or counties identified on the mechanics' notice and lien registry internet site at the time of posting the required notices pursuant to sections 572.13A and 572.13B shall be the only county or counties in which the building, land, or improvement may be charged with a mechanic's lien.” (underlining added).
Change #2, to Iowa Code Section 572.32(1) & (2): This change clarifies that attorney fees are recoverable on a mechanic’s lien foreclosure claim and on a claim against a bond posted to discharge a mechanic’s lien. This change resolves a split among Iowa district courts on this issue under the prior statutory language. Below is the revised statutory language:
“1. In a court action to enforce a mechanic's lien, or an action brought upon any bond given in lieu thereof, a prevailing plaintiff may be awarded reasonable attorney fees.
2. In a court action to challenge a mechanic's lien posted on a residential construction property, or any bond given in lieu thereof, if the person challenging the lien or defending against any action on the bond prevails, the court may award reasonable attorney fees and actual damages. If the court determines that the mechanic's lien was posted in bad faith or the supporting affidavit was materially false, the court shall award the owner reasonable attorney fees plus an amount not less than five hundred dollars or the amount of the lien, whichever is less.” (underlining added).