A lien is a document filed by a claimant in the recorder’s office against a property for recovery of a debt from the property owner for labor or furnishing of materials for the improvement of real property. By filing a lien, as a matter of public record, the claimant (typically a contractor) puts the owner (and anyone who might have a future interest in the property) on notice that he has a claim against the property.
Timetables are an essential part of lien laws, and the requirements for notices, delivery, and enforcement can vary based on the situation. Alaska lien law is codified at AS 34.35.050-120. Make sure to understand the rules, keep a calendar to track important dates and deadlines, and always consult a lawyer for guidance to ensure compliance with state law when filing a lien.
For the purposes of this article, the term “owner” means the person owning the property or the person claiming an interest in the property. “Claimant,” as defined by AS 34.35.050, means a person who is entitled to enforce a lien to secure payment of the contract price for labor or materials furnished. This includes a person who:
- has performed labor for the construction, alteration, or repair of real property;
- is a trustee of an employee benefit trust for the benefit of persons performing the labor;
- furnishes materials or equipment delivered under contract that is/are used in the construction, alteration, or repair; or
- provides a service under contract such as the preparation of plans, surveys, or architectural or engineering plans or drawings for the construction, alteration, or repair, whether actually implemented on that property.
For successful recovery, the parties must comply with notice requirements. Alaska law establishes what constitutes giving notice. Any statutory notices required should either be mailed by first-class mail with signed receipt or delivered with a receipt signed by the person to whom the notice is directed or that person’s agent. Notices are valid when delivered to the lender at the address provided in the instrument securing the lender; the owner at his/her last known address; a prime contractor at its last known address; and a potential lien claimant at the address specified in a stop lending notice, notice of right to lien, or claim of lien (AS 34.35.120).
Before enacting a contract or any time after commencing work, a potential claimant files what is called a NOTICE OF RIGHT TO LIEN under AS 34.35.064. As the name suggests, the notice asserts the claimant’s right to file a lien by putting the owner on notice. When a notice of right to lien is filed, the owner has the burden of proof to show he did not know of of or did not give consent to the labor or furnishing of material, service, or equipment. Without recording a notice of right to lien, it will be the claimant’s burden of proof to show that the owner knew of and consented to the furnishing of labor, material, service, or equipment.
An owner, lender, or contractor may request that a claimant who has filed a notice of right to lien provide, within five days of the request, an up-to-date ACCOUNTING OF THE AMOUNT DUE and unpaid to the claimant under the contract and a description of the labor, materials, and equipment that the claimant anticipates furnishing (34.35.064(b)).
The time period for claiming a lien is dependent upon whether the owner files a NOTICE OF COMPLETION under 34.35.071. The owner files a notice of completion in the district recorder’s office where the property is located, in addition to giving 5-days’ notice before recording to all claimants who have given a notice of right to lien at least 10 days prior to the notice of completion (34.35.071).
Generally, without an owner-filed notice of completion, a claimant cannot record a claim of lien later than 120 after completion of the construction contract or ceasing to furnish labor, material, services, or equipment. When an owner files a notice of completion, the claimant has 15 days after the notice of completion is filed to record a claim of lien or notice of right to lien (34.35.068).
The 15-day limitation only applies to claimants who received advanced notification of the recording of a notice of completion (OWNER’S NOTICE OF INTENT TO FILE NOTICE OF COMPLETION), or who did not file a notice of right to lien. Claimants who filed a notice of right to lien but were not given advanced notice of the recording of a notice of completion still have 120 days to file a lien (34.35.068). if the claimant files a notice of right to lien within 15 days of the filing of a notice of completion, he also has 120 days to file a lien.
A CLAIM OF LIEN under 34.35.070 is made by oath of the claimant. A valid claim states the legal description of the property subject to lien, the name of the owner, and name and address of the claimant, the name and address of the person with whom the claimant contracted, and a general description of the labor, materials, services or equipment the claimant furnished, the last date such was furnished, as well as the contract price and the amount due to the claimant.
A lien is valid unless the owner or person claiming an interest in the land gives notice within three days of obtaining knowledge of the construction, alteration, or repair posts a NOTICE OF NONRESPONSIBILITY under 34.35.065. A notice of nonresponsibility states that the owner will not be held responsible for cost of improvements. The notice, signed by the owner, must be posted in a conspicuous place on the property undergoing the improvement, with a notarized copy recorded in the district recorder’s office.
Alaska law allows a disputing owner to record a bond at 1.5 times the amount of the claim before the filing of a suit to enforce the lien. The lien is released on the property and the owner freed from action brought to foreclose the claim of lien once the clerk accepts the bond, with the bond acting as surety if the claimant recovers on the claim of lien (34.35.072).
Alaska statutes do not make provisions for the release of a lien other than the expiration (statute of limitations). Liens expire after six months have passed since the recording of a claim of lien, unless an action is commenced to enforce the lien within that time or within the time granted by an extension (34.35.080). A lien that has been granted an extension is void against any person who acquires an interest in the property unless a notice of lis pendens is filed before the conveyance to such person is recorded (34.35.080(c)).
A claimant to whom payment is due by the owner may issue a STOP-LENDING NOTICE under 34.35.062 to the lender, with a copy provided to each owner and contractor. The notice, verified by the claimant, instructs the lender to stop providing construction financing and contains the claimant’s contact information, describes the real property and names the owner of the property, and states the amount due to the claimant. A stop lending notice expires after 90 days of the lender’s receipt, unless the claimant commences an action on the claim and provides notification of such action to the lender (34.35.062(b)). This may prompt the owner to furnish a CERTIFICATION OF JOB PROGRESS under 34.35.061(f) to the lender.
Under Alaska law, a person having a lien on real property may bring an action to foreclose the lien (09.45.170). An action to foreclose a lien is brought by the claimant to the superior court in the judicial district where the property is situated (34.35.110). The court may direct the sale of the property or a portion thereof, with proceeds applying to the amount due to the plaintiff (typically the claimant).
A LIS PENDENS, or notice of pending action, is a legal document notifying all parties with any interest in real property that a legal action is pending which affects the property. The document is filed in the recorder’s office in the district where the property is situated, and contains the names of the parties involved, the object of the action, and a legal description of the property affected (09.45.940).
A claimant who fails to promptly revoke the stop-lending notice or remove the claim of lien from record is liable for damages (34.35.074(b)). To release a lien, a claimant must file a RELEASE OF LIEN in the recorder’s office where the claim of lien is filed. An effective lien identifies both parties, references the claim of lien, describes the property affected, and is signed by the claimant in the presence of a notary public.
If a claimant has been paid by an owner before filing a claim of lien, a WAIVER OF LIEN may be recorded stating that the claimant has received payment and released the right to file a future lien. Employees of the claimant (i.e., subcontractors) cannot waive right to claim a lien (34.35.117(b)). Once the waiver is granted, it operates as a defense to any lien filed by the claimant (and the claimant would likely be liable for any resulting damages). Therefore, only use lien waivers when evidence of the payment can be verified. Do not rely solely on promises or assurances to pay.
This article is provided for informational purposes only and is not a substitute for legal advice. Contact an attorney with questions about mechanic’s liens, or for any other issues related to real property in Alaska.