Bill > HB1271

This bill amends Arkansas law concerning mechanics' and materialmen's liens (legal claims that contractors or suppliers can place on a property to secure payment for work or materials) by clarifying the priority of liens in mortgage construction loans. The bill modifies existing statutes to specify that liens for labor or materials will now be "subject to" (rather than "in preference to") any pre-existing encumbrances on real estate. For mortgages or security instruments funding construction, the bill establishes that such financial instruments will have priority over subsequent mechanics' liens. The legislation introduces a new provision allowing lenders to rely on affidavits from licensed professionals (like appraisers, architects, surveyors, or engineers) that confirm no construction work or material placement has occurred at a property, which must be filed within four business days before or after the mortgage filing. For residential properties (one-to-four family units), the affidavit can be made by a lender's employee or title agent. The bill also stipulates that facts in these affidavits are presumed true, cannot be easily challenged, and that providing a false affidavit makes the person responsible for any resulting damages. Additionally, if construction begins before a mortgage is recorded, only liens for work done before the mortgage's recordation will have priority over the mortgage.

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https://arkleg.state.ar.us/Bills/Detail?id=hb1271&ddBienniumSession=2025%2F2025R