Construction Law Update: Governor Reynolds Signs Bill into Law That Amends Iowa’s Mechanic’s Lien Statute
On April 30, 2021, Governor Kim Reynolds signed House File 561 into law, which amends Iowa mechanic’s lien statute at Iowa Code Chapter 572. It can be found at the Iowa Legislature Legislation Bill Book. The new law becomes effective on January 1, 2022, and it makes two main changes.
the law amends Iowa Code Section 572.8 to allow one lien to cover property located in more than one county.
Previously, the statutory language arguably permitted a lien to cover property only located in one county. Therefore, if a lien claimant worked on a project covering property located in two adjacent counties, the lien claimant would have to file two liens, with each one covering property located in just one of the counties. Now, such a lien claimant may file one lien covering the entire project property spanning both counties.
the law amends Iowa Code Section 572.32 to allow recovery of attorneys fees even if a mechanic’s lien is discharged by a bond.
Previously, it was unclear if the statute permitted recovery of attorney fees if a mechanic’s lien were discharged by an Iowa Code Section 572.15 bond. On this issue, there was no consensus among courts, with several district courts ruling that attorney fees were not recoverable once a lien was bonded off, and several other district courts ruling that attorney fees were still recoverable. The Iowa Supreme Court had not addressed the issue, thereby causing substantial uncertainty on the issue. The new law resolves the uncertainty and makes clear that recovery of attorney fees under Iowa Code Section 572.32 is unaffected by a mechanic’s lien being discharged by a bond.