Act 984, Acts of 2021, finally rescinded the most punitive element of the mechanic’s and materialman’s lien law. Building contractors who perform work or provide materials in construction are entitled to be paid for the products and services. When a contractor has not been paid, one option they have is to file a “verified statement of account” at the courthouse and, if they cross every “t” and dot every “i,” they are entitled to a “mechanic’s and materialman’s lien” on the property they worked on. That “lien” then gives the contractor the right to sell the property at a court-ordered auction and pay themselves back what they should have been paid. This lien right applies to both commercial and residential properties, but the law requires more of the contractor who want to assert a lien against a residence. Specifically, the contractor has to provide the owner of the residence a printed “notice” that advises the owner of the contractor’s lien right prior to beginning construction or delivering material. Historically, the failure to provide this notice meant that the contractor not only could not assert a lien – they also could not sue to collect from a non-paying customer. This put a lot of contractors in a very unfavorable situation where they did not know that they needed to give pre-construction notice to the owner, but they lost their right to collect on their contract anyway. Fortunately, after years of lobbying, the General Assembly finally fixed this problem with the enactment of Act 984. A link to the Act is provided here: https://www.arkleg.state.ar.us/Acts/FTPDocument?path=%2FACTS%2F2021R%2FPublic%2F&file=984.pdf&ddBienniumSession=2021%2F2021R
If you need further information about the Arkansas mechanic’s and materialman’s lien law, please call or email Harrison Kemp at 501-222-7378 or firstname.lastname@example.org.