The bill amends the law regarding mechanics' and materialmen's liens in Arkansas, specifically addressing the priority of these liens in relation to mortgage construction loans. It clarifies that liens for labor and materials will attach to the improvement but will be subject to any existing encumbrances on the property prior to construction. Additionally, if a prior encumbrance was established to fund the construction or repair, it will take precedence over other liens established under this subchapter.

Furthermore, the bill introduces provisions that allow individuals acquiring a mortgage or security interest for construction funding to rely on affidavits from licensed professionals who have inspected the property. These affidavits must be filed within a specific timeframe relative to the mortgage filing and will be considered true unless actual fraud is proven. The bill also stipulates that if construction begins before the mortgage is recorded, only liens for labor and materials provided before the mortgage will have priority over it.

Statutes affected:
Old version HB1271 V2 - 3-13-2025 10:26 AM: 18-44-110(b)
Old version HB1271 Original - 1-27-2025 04:09 PM: 18-44-110(b)
HB 1271: 18-44-110(b)
Act 479: 18-44-110(b)