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Senate Study Bill 288

Conference Committee Text

PAG LIN
  1  1    Section 1.  Section 572.18, Code 1995, is amended to read
  1  2 as follows:
  1  3    572.18  PRIORITY OVER OTHER LIENS &endash; PRIORITY OF CERTAIN
  1  4 CONSTRUCTION MORTGAGE LIENS.
  1  5    Mechanics' liens shall be preferred to all other liens
  1  6 which may attach to or upon a building or improvement and to
  1  7 the land upon which it is situated, except liens of record
  1  8 prior to the time of the original commencement of the work or
  1  9 improvements.  However, construction mortgage liens shall be
  1 10 preferred to all mechanics' liens of claimants who commenced
  1 11 their particular work or improvement subsequent to the date of
  1 12 the recording of the construction mortgage lien.  For purposes
  1 13 of this section, a lien is a "construction mortgage lien" to
  1 14 the extent that it secures loans or advancements made to
  1 15 directly finance for the purpose of financing work or
  1 16 improvements upon the real estate which secures the lien or
  1 17 for the purpose of financing the acquisition of real estate as
  1 18 part of the same loan transaction that finances work or
  1 19 improvements upon the real estate.  The rights of purchasers,
  1 20 encumbrancers, and other persons who acquire interests in good
  1 21 faith and for a valuable consideration, and without notice,
  1 22 after the expiration of the time for filing claims for
  1 23 mechanics' liens, are prior to the claims of all contractors
  1 24 or subcontractors who have not, at the dates such rights and
  1 25 interests were acquired, filed their claims for such liens.  
  1 26                           EXPLANATION
  1 27    This bill provides that a construction mortgage lien
  1 28 includes a lien that secures a loan or advancement for the
  1 29 purpose of financing the acquisition of real estate so long as
  1 30 the financing of work or improvements upon the real estate is
  1 31 a part of the same loan transaction.  
  1 32 LSB 2276SC 76
  1 33 ec/jj/8
     
Text: SSB00287                          Text: SSB00289
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