Stricken language would be deleted from and underlined language would be added to present law.
Act 479 of the Regular Session
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State of Arkansas As Engrossed: S3/13/25 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1271 3
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By: Representative Warren 5
By: Senator C. Penzo 6
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For An Act To Be Entitled 8
AN ACT TO AMEND THE LAW CONCERNING MECHANICS' AND 9
MATERIALMEN'S LIENS; TO CLARIFY THE PRIORITY OF LIENS 10
IN MORTGAGE CONSTRUCTION LOANS; AND FOR OTHER 11
PURPOSES. 12
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Subtitle 15
TO AMEND THE LAW CONCERNING MECHANICS' 16
AND MATERIALMEN'S LIENS; AND TO CLARIFY 17
THE PRIORITY OF LIENS IN MORTGAGE 18
CONSTRUCTION LOANS. 19
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 21
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SECTION 1. Arkansas Code ยง 18 -44-110(b)(1), concerning lien attachment 23
and priority, is amended to read as follows: 24
(b)(1)(A) The liens for labor performed or materials or fixtures 25
furnished, as provided for in this subchapter, shall attach to the 26
improvement on which the labor was performed or the materials or fixtures 27
were furnished in preference subject to any encumbrance existing on the real 28
estate prior to the commencement of construction or repair of the 29
improvement. 30
(B)(i) In all cases in which the prior encumbrance was 31
given for the purpose of funding construction or repair of the improvement, 32
that lien shall have priority over all liens given by this subchapter. 33
(ii)(a) A person who acquires or intends to acquire 34
a mortgage or other security instrument that provides a security interest for 35
the purpose of funding construction or repair of the improvement may 36 As Engrossed: S3/13/25 HB1271
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conclusively rely on an affidavit made by a licensed appraiser, architect, 1
surveyor, or engineer if the licensed appraiser, architect, surveyor , or 2
engineer has inspected the property at a specified time and work had not been 3
commenced or materials placed at its site at the time of the inspection, if 4
the inspection occurs and the affidavit is filed within four (4) business 5
days before or within four (4) business days after the filing of the mortgage 6
or other security instrument that provides a security interest. 7
(b) When a mortgage or other security interest 8
for the purpose of funding construction or repair of the improvement will 9
encumber property on which a residential structure that is a single one -to-10
four family unit is located or will be constructed, the person who made the 11
affidavit described in subdivision (b)(1)(B)(ii)(a) of this section may be an 12
employee or designee of the lender or licensed title agent. 13
(iii) The facts in an affidavit filed under 14
subdivision (b)(1)(B)(ii) of this section: 15
(a) Shall be considered true at the time of 16
the inspection; and 17
(b) Shall remain true at the time of the 18
filing of the mortgage or other security instrument that provides a security 19
interest. 20
(iv) The correctness of the facts contained in an 21
affidavit filed under subdivision (b)(1)(B)(ii) of this section shall not be 22
controverted to affect the priority of the rights of the person to whom or 23
for whom it is given, unless actual fraud by that person is proved. 24
(v) A person who provides a false affidavit under 25
subdivision (b)(1)(B)(ii) of this section shall be responsible for any loss 26
or damage suffered by a person whose rights are adversely affected. 27
(C) Notwithstanding subsection (a) of this section, in the 28
event that construction commences before the recordation of the mortgage or 29
other security instrument that provides a security interest for the purpose 30
of funding construction or repair of the improvement, only the liens for 31
providing labor, materials, or supplies before the recordation of the 32
mortgage or other security instrument that provides a security interest shall 33
have priority over the mortgage or other security instrument that provides a 34
security interest. 35
36 As Engrossed: S3/13/25 HB1271
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/s/Warren 1
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APPROVED: 4/8/25 4
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