AR
Arkansas House Bill HB1271

Arkansas 2025 Regular Session

Arkansas House Bill HB1271 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
2-Act 479 of the Regular Session
3-*ANS148* 03-13-2025 10:26:02 ANS148
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5-State of Arkansas As Engrossed: S3/13/25 1
2+*ANS148* 01/27/2025 3:35:56 PM ANS148
3+State of Arkansas 1
64 95th General Assembly A Bill 2
75 Regular Session, 2025 HOUSE BILL 1271 3
86 4
97 By: Representative Warren 5
108 By: Senator C. Penzo 6
119 7
1210 For An Act To Be Entitled 8
1311 AN ACT TO AMEND THE LAW CONCERNING MECHANICS' AND 9
1412 MATERIALMEN'S LIENS; TO CLARIFY THE PRIORITY OF LIENS 10
1513 IN MORTGAGE CONSTRUCTION LOANS; AND FOR OTHER 11
1614 PURPOSES. 12
1715 13
1816 14
1917 Subtitle 15
2018 TO AMEND THE LAW CONCERNING MECHANICS' 16
2119 AND MATERIALMEN'S LIENS; AND TO CLARIFY 17
2220 THE PRIORITY OF LIENS IN MORTGAGE 18
2321 CONSTRUCTION LOANS. 19
2422 20
2523 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 21
2624 22
2725 SECTION 1. Arkansas Code ยง 18 -44-110(b)(1), concerning lien attachment 23
2826 and priority, is amended to read as follows: 24
2927 (b)(1)(A) The liens for labor performed or materials or fixtures 25
3028 furnished, as provided for in this subchapter, shall attach to the 26
3129 improvement on which the labor was performed or the materials or fixtures 27
32-were furnished in preference subject to any encumbrance existing on the real 28
33-estate prior to the commencement of construction or repair of the 29
34-improvement. 30
35- (B)(i) In all cases in which the prior encumbrance was 31
36-given for the purpose of funding construction or repair of the improvement, 32
37-that lien shall have priority over all liens given by this subchapter. 33
38- (ii)(a) A person who acquires or intends to acquire 34
39-a mortgage or other security instrument that provides a security interest for 35
40-the purpose of funding construction or repair of the improvement may 36 As Engrossed: S3/13/25 HB1271
30+were furnished in preference to any encumbrance existing on the real estate 28
31+prior to the commencement of construction or repair of the improvement . 29
32+ (B)(i) In all cases in which the prior encumbrance was 30
33+given for the purpose of funding construction or repair of the improvement, 31
34+that lien shall have priority over all liens given by this subchapter. 32
35+ (ii) A person who acquires or intends to acquire a 33
36+mortgage or other security instrument that provides a security interest for 34
37+the purpose of funding construction or repair of the improvement may 35
38+conclusively rely on an affidavit made by a licensed appraiser, surveyor, or 36 HB1271
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45-conclusively rely on an affidavit made by a licensed appraiser, architect, 1
46-surveyor, or engineer if the licensed appraiser, architect, surveyor , or 2
47-engineer has inspected the property at a specified time and work had not been 3
48-commenced or materials placed at its site at the time of the inspection, if 4
49-the inspection occurs and the affidavit is filed within four (4) business 5
50-days before or within four (4) business days after the filing of the mortgage 6
51-or other security instrument that provides a security interest. 7
52- (b) When a mortgage or other security interest 8
53-for the purpose of funding construction or repair of the improvement will 9
54-encumber property on which a residential structure that is a single one -to-10
55-four family unit is located or will be constructed, the person who made the 11
56-affidavit described in subdivision (b)(1)(B)(ii)(a) of this section may be an 12
57-employee or designee of the lender or licensed title agent. 13
58- (iii) The facts in an affidavit filed under 14
59-subdivision (b)(1)(B)(ii) of this section: 15
60- (a) Shall be considered true at the time of 16
61-the inspection; and 17
62- (b) Shall remain true at the time of the 18
63-filing of the mortgage or other security instrument that provides a security 19
64-interest. 20
65- (iv) The correctness of the facts contained in an 21
66-affidavit filed under subdivision (b)(1)(B)(ii) of this section shall not be 22
67-controverted to affect the priority of the rights of the person to whom or 23
68-for whom it is given, unless actual fraud by that person is proved. 24
69- (v) A person who provides a false affidavit under 25
70-subdivision (b)(1)(B)(ii) of this section shall be responsible for any loss 26
71-or damage suffered by a person whose rights are adversely affected. 27
72- (C) Notwithstanding subsection (a) of this section, in the 28
73-event that construction commences before the recordation of the mortgage or 29
74-other security instrument that provides a security interest for the purpose 30
75-of funding construction or repair of the improvement, only the liens for 31
76-providing labor, materials, or supplies before the recordation of the 32
77-mortgage or other security instrument that provides a security interest shall 33
78-have priority over the mortgage or other security instrument that provides a 34
79-security interest. 35
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41+engineer if the licensed appraiser, surveyor, or engineer has inspected the 1
42+property at a specified time and work had not been commenced or materials 2
43+placed at its site at the time of the inspection, if the inspection occurs 3
44+and the affidavit is filed within four (4) business days before or within 4
45+four (4) business days after the filing of the mortgage or other security 5
46+instrument that provides a security interest. 6
47+ (iii) The facts in an affidavit filed under 7
48+subdivision (b)(1)(B)(ii) of this section: 8
49+ (a) Shall be considered true at the time of 9
50+the inspection; and 10
51+ (b) Shall remain true at the time of the 11
52+filing of the mortgage or other security instrument that provides a security 12
53+interest. 13
54+ (iv) The correctness of the facts contained in an 14
55+affidavit filed under subdivision (b)(1)(B)(ii) of this section shall not be 15
56+controverted to affect the priority of the rights of the person to whom or 16
57+for whom it is given, unless actual fraud by that person is proved. 17
58+ (v) A person who provides a false affidavit under 18
59+subdivision (b)(1)(B)(ii) of this section shall be responsible for any loss 19
60+or damage suffered by a person whose rights are adversely affected. 20
61+ (C) Except as provided in subsection (a) of this section, 21
62+in the event that construction commences before the recordation of the 22
63+mortgage or other security instrument that provides a security interest for 23
64+the purpose of funding construction or repair of the improvement, only the 24
65+liens for providing labor, materials, or supplies before the recordation of 25
66+the mortgage or other security instrument that provides a security interest 26
67+shall have priority over the mortgage or other security instrument that 27
68+provides a security interest. 28
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