Arkansas Mechanic’s Lien Process

Mechanic’s liens, sometimes referred to as materialmen’s liens, are legal instruments that encumber title to real property to secure payment from the property owner for the balance owed on an enforceable contract for constructions on or improvements to the property. Arkansas law stipulates that mechanic’s liens have priority over all other encumbrances (except a prior encumbrance given for construction or repair of the improvement) that attach to the real estate (Ark. Code Sec. 18-44-110).

The claimants eligible to file a lien are contractors, subcontractors, or suppliers providing labor, services, material, or equipment for improvements of a property under a contract with an owner, proprietor, contractor, or subcontractor (18-44-101(a)). An owner includes the person or persons having legal title to the property and any person for whose immediate enjoyment, use, or benefit the improvement is made (18-44-106).

Before a claimant can file a lien on residential property, the claimant must provide notice to the owner under Ark. Code Sec. 18-44-115(a) prior to the furnishing of any labor, material, services, or equipment. This notice states that it the claimant is entitled to place a lien against the property if not paid the full contract price. A future lien is invalid without the owner or owner’s agent first receiving a copy of the notice (18-44-115). The notice is typically incorporated into or affixed to the contract and contains specific wording set forth by statute.

This notice is not required if the contractor supplies a bond or if the transaction is a direct sale to the property owner (as in, the property owner order materials or services from the lien claimant) (18-44-115(a)(8)). For owners who are nonresidents or owners who do not reside in the same county where the work is taking place, the notice may be recorded in the office of the recorder of deeds of the county where the property is situated (18-44-116).

Any owner, proprietor, supplier, or subcontractor may request from a contractor or subcontractor a list of all parties furnishing materials to the building and the amount due to each party, and certification that the owner has received the notice to owner by contractor (18-44-108(a)). Contractors and subcontractors have five business days to fulfill the request.

Arkansas law also mandates that claimants give a notice of intent to file lien at least 10 days before filing a claim of lien under 18-44-114. The law provides that notice can be served on the owner by delivery by a process server or competent witness or mailed with restricted delivery and return receipt requested, or by third-party delivery with means of verification of delivery (18-44-114).

To file a lien, a claimant records a statement of account and claim of lien with the clerk of the circuit court of the county in which the building or improvement charged with the lien is located, within 120 days after the labor, material, supplies, or equipment has been furnished. The account and claim of lien shows the balance owed to the claimant and must contain a complete description of the property, verified by affidavit. Arkansas requires a lien claimant to give notice at the time the lien is recorded with an affidavit of notice attached to the lien account. This affidavit must contain a sworn statement evidencing compliance with applicable notice requirements under Secs. 18-44-114–18-44-116 along with copies of said notices (18-44-117).

To contest a lien, the owner or other person liable for payment of the lien can file a bond with the circuit clerk in the amount of the lien together with interest and costs of action (18-44-118). Upon the filing of a bond, the circuit court clerk must give the claimant three days’ notice of the filing. The bond is null and void if no action is filed to enforce the lien within the requisite time.

Actions must be commenced to enforce the lien within fifteen months of filing a claim of lien. Liens cease to exist after the 15 months unless an action is commenced or a lis pendens is filed (see 16-59-101). When the debt secured by a lien is paid off, the claimant must enter a satisfaction (release) of the lien in the office of the clerk of the circuit court within 10 days of the payment (18-44-131). A claimant may also file a release to cancel the lien.

Lien law is complex. To ensure compliance with the various rules and obligations, consult an attorney licensed in the State of Arkansas for guidance.

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