House File 633 - Introduced HOUSE FILE 633 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HF 262) A BILL FOR An Act concerning mechanics’ liens including the establishment 1 of a state construction registry for residential 2 construction property, providing for an appropriation, and 3 including effective date provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2236HV (3) 84 rh/nh

H.F. 633 Section 1. Section 207.23, subsection 1, Code 2011, is 1 amended to read as follows: 2 1. Within six months after the completion of a project to 3 restore, reclaim, abate, control, or prevent adverse effects 4 of past coal mining practices on privately owned land, the 5 division shall itemize the money expended on the project and 6 may file a lien statement in the manner provided in section 7 572.8 in the office of the district court clerk of each county 8 in which a portion of the property affected by the project is 9 located, together with a notarized appraisal by an independent 10 appraiser of the value of the land before the restoration, 11 reclamation, abatement, control, or prevention of adverse 12 effects of past mining practices if the money so expended 13 results in a significant increase in property value. A copy 14 of the lien statement and the appraisal, if required, shall be 15 served upon affected property owners in the manner provided 16 for service of an original notice. The lien shall not exceed 17 the amount determined by the appraiser to be the increase in 18 the market value of the land as a result of the restoration, 19 reclamation, abatement, control, or prevention of adverse 20 effects of past coal mining practices. A lien shall not be 21 filed in accordance with this subsection against the property 22 of a person who owned the surface prior to May 2, 1977, and who 23 neither consented to, participated in, nor exercised control 24 over the mining operation which necessitated the reclamation 25 performed. 26 Sec. 2. Section 572.1, Code 2011, is amended to read as 27 follows: 28 572.1 Definitions and rules of construction. 29 For the purpose of this chapter : 30 1. “Administrator” means the secretary of state. 31 1. 2. “Building” shall be construed as if followed by the 32 words “erection, or other improvement upon land”. 33 3. “General contractor” includes every person who does work 34 or furnishes materials by contract, express or implied, with an 35 -1- LSB 2236HV (3) 84 rh/nh 1/ 23

H.F. 633 owner. “General contractor” does not include a person who does 1 work or furnishes materials on contract with an owner-builder. 2 2. 4. “Labor” means labor completed by the claimant. 3 3. 5. “Material” shall , in addition to its ordinary 4 meaning, include includes machinery, tools, fixtures, trees, 5 evergreens, vines, plants, shrubs, tubers, bulbs, hedges, 6 bushes, sod, soil, dirt, mulch, peat, fertilizer, fence wire, 7 fence material, fence posts, tile, and the use of forms, 8 accessories, and equipment furnished by the claimant. 9 4. 6. “Owner” means the record legal or equitable 10 titleholder and every person for whose use or benefit any 11 building, erection, or other improvement is made, having the 12 capacity to contract, including guardians of record . 13 5. “Owner-occupied dwelling” means the homestead of an 14 owner, as defined in section 561.1 , and without respect to the 15 value limitations in section 561.3 , and actually occupied by 16 the owner or the spouse of the owner, or both. “Owner-occupied 17 dwelling” includes a newly constructed dwelling to be occupied 18 by the owner as a homestead, or a dwelling that is under 19 construction and being built by or for an owner who will occupy 20 the dwelling as a homestead. 21 7. “Owner-builder” means the legal or equitable titleholder 22 of record who furnishes material for or performs labor upon a 23 building, erection, or other improvement, or who contracts with 24 a subcontractor to furnish material for or perform labor upon 25 a building, erection, or other improvement and who offers or 26 intends to offer to sell the owner-builder’s property without 27 occupying or using the structures, properties, developments, 28 or improvements for a period of more than one year from the 29 date the structure, property, development, or improvement is 30 substantially completed or abandoned. 31 8. “Residential construction” means construction on 32 single-family or two-family dwellings occupied or used, or 33 intended to be occupied or used, primarily for residential 34 purposes, and includes real property pursuant to chapter 499B. 35 -2- LSB 2236HV (3) 84 rh/nh 2/ 23

H.F. 633 9. “State construction registry” means a centralized 1 computer database maintained on the internet by the 2 administrator that provides a central repository for the 3 submission and management of preliminary notices, notices of 4 commencement of work on residential construction properties, 5 and mechanics’ liens on all construction properties. 6 10. “State construction registry number” means a number 7 provided by the administrator for all residential construction 8 properties posted to the state construction registry. 9 6. 11. “Subcontractor” shall include includes every person 10 furnishing material or performing labor upon any building, 11 erection, or other improvement, except those having contracts 12 directly with the owner. “Subcontractor” shall include those 13 persons having contracts directly with an owner-builder. 14 Sec. 3. Section 572.2, Code 2011, is amended to read as 15 follows: 16 572.2 Persons entitled to lien. 17 1. Every person who shall furnish furnishes any material 18 or labor for, or perform performs any labor upon, any building 19 or land for improvement, alteration, or repair thereof, 20 including those engaged in the construction or repair of any 21 work of internal or external improvement, and those engaged 22 in grading, sodding, installing nursery stock, landscaping, 23 sidewalk building, fencing on any land or lot, by virtue of any 24 contract with the owner, owner-builder, general contractor, 25 or subcontractor shall have a lien upon such building or 26 improvement, and land belonging to the owner on which the same 27 is situated or upon the land or lot so graded, landscaped, 28 fenced, or otherwise improved, altered, or repaired, to secure 29 payment for the material or labor furnished or labor performed. 30 2. If material is rented by a person to the owner, general 31 contractor, or subcontractor, the person shall have a lien 32 upon such building, improvement, or land to secure payment for 33 the material rental. The lien is for the reasonable rental 34 value during the period of actual use of the material and any 35 -3- LSB 2236HV (3) 84 rh/nh 3/ 23

H.F. 633 reasonable periods of nonuse of the material taken into account 1 in the rental agreement. The delivery of material to such 2 building, improvement, or land, whether or not delivery is made 3 by the person, creates a presumption that the material was 4 used in the course of alteration, construction, or repair of 5 the building, improvement, or land. However, this presumption 6 shall not pertain to recoveries sought under a surety bond. 7 3. An owner-builder is not entitled to a lien under 8 this chapter as to work the owner-builder performs, or is 9 contractually obligated to perform, prior to transferring title 10 to the buyer. 11 Sec. 4. Section 572.8, Code 2011, is amended to read as 12 follows: 13 572.8 Perfection of lien. 14 1. A person shall perfect a mechanic’s lien by filing with 15 the clerk of the district court of the county in which the 16 building, land, or improvement to be charged with the lien is 17 situated posting to the state construction registry internet 18 website a verified statement of account of the demand due the 19 person, after allowing all credits, setting forth: 20 a. The date when such material was first furnished or labor 21 first performed, and the date on which the last of the material 22 was furnished or the last of the labor was performed. 23 b. The legal description of the property to be charged with 24 the lien. 25 c. The name and last known mailing address of the owner of 26 the property. 27 d. The address of the property or a description of the 28 location of the property. 29 e. The tax parcel identification number. 30 2. Upon the filing posting of the lien, the clerk of court 31 administrator shall mail a copy of the lien to the owner. If 32 the statement of the lien consists of more than one page, the 33 clerk administrator may omit such pages as consist solely of an 34 accounting of the material furnished or labor performed. In 35 -4- LSB 2236HV (3) 84 rh/nh 4/ 23

H.F. 633 this case, the clerk administrator shall attach a notification 1 that pages of accounting were omitted and may be inspected in 2 the clerk’s office on the state construction registry internet 3 website . 4 3. A lien perfected under this section shall be limited to 5 the county in which the building, land, or improvement to be 6 charged with the lien is situated. 7 Sec. 5. Section 572.9, Code 2011, is amended to read as 8 follows: 9 572.9 Time of filing lien posting . 10 The statement of account required by section 572.8 shall be 11 filed posted by a principal general contractor or subcontractor 12 within two years and ninety days after the date on which the 13 last of the material was furnished or the last of the labor was 14 performed. 15 Sec. 6. Section 572.10, Code 2011, is amended to read as 16 follows: 17 572.10 Perfecting lien after lapse of ninety days. 18 A general contractor or a subcontractor may perfect a 19 mechanic’s lien pursuant to section 572.8 beyond ninety days 20 after the date on which the last of the material was furnished 21 or the last of the labor was performed by posting a lien to 22 the state construction registry internet website and giving 23 written notice thereof to the owner. Such notice may be served 24 by any person in the manner original notices are required to be 25 served. If the party to be served is out of the county wherein 26 the property is situated, a return of that fact by the person 27 charged with making such service shall constitute sufficient 28 service from and after the time it was filed with the clerk of 29 the district court posted to the state construction registry 30 internet website . 31 Sec. 7. Section 572.11, Code 2011, is amended to read as 32 follows: 33 572.11 Extent of lien filed posted after ninety days. 34 Liens perfected under section 572.10 shall be enforced 35 -5- LSB 2236HV (3) 84 rh/nh 5/ 23

H.F. 633 against the property or upon the bond, if given, by the owner 1 or by the owner-builder’s buyer , only to the extent of the 2 balance due from the owner to the general contractor or from 3 the owner-builder’s buyer to the owner-builder at the time of 4 the service of such notice; but if the bond was given by the 5 general contractor or owner-builder , or person contracting with 6 the subcontractor filing the claim for a lien, such bond shall 7 be enforced to the full extent of the amount found due the 8 subcontractor. 9 Sec. 8. Section 572.13, Code 2011, is amended by striking 10 the section and inserting in lieu thereof the following: 11 572.13 General contractor —— owner notice —— residential 12 construction. 13 1. A general contractor who has contracted or will contract 14 with a subcontractor to provide labor or furnish material for 15 the property shall provide the owner with the following owner 16 notice in writing in boldface type of a minimum size of ten 17 points: 18 “Persons or companies furnishing labor or materials for 19 the improvement of real property may enforce a lien upon the 20 improved property if they are not paid for their contributions, 21 even if the parties have no direct contractual relationship 22 with the owner. The state construction registry provides 23 a listing of all persons or companies furnishing labor or 24 materials who have posted a lien or who may post a lien upon 25 the improved property. If the person or company has posted its 26 notice or lien to the state construction registry, you may be 27 required to pay the person or company even if you have paid the 28 general contractor the full amount due. Therefore, check the 29 state construction registry internet website for information 30 about the property including persons or companies furnishing 31 labor or materials before paying your general contractor. In 32 addition, when making payment to your general contractor, it is 33 important to obtain lien waivers from your general contractor 34 and from persons or companies furnishing labor or materials 35 -6- LSB 2236HV (3) 84 rh/nh 6/ 23

H.F. 633 to your property. The information in the state construction 1 registry is posted on the internet website of the state 2 construction registry.” 3 2. The notice described in subsection 1 shall also contain 4 the internet website address and toll-free telephone number of 5 the state construction registry. 6 3. A general contractor who fails to provide notice pursuant 7 to this section is not entitled to a lien and remedy provided 8 by this chapter. 9 4. This section applies only to residential construction 10 properties. 11 Sec. 9. NEW SECTION . 572.13A Notice of commencement of work 12 —— general contractor —— owner-builder. 13 1. A general contractor or owner-builder who has contracted 14 or will contract with a subcontractor to provide labor or 15 furnish material for the property shall post a notice of 16 commencement of work to the state construction registry 17 internet website within ten days of commencement of work on 18 the property. A notice of commencement of work is effective 19 only as to any labor, service, equipment, or material furnished 20 to the property subsequent to the posting of the notice of 21 commencement of work. A notice of commencement of work shall 22 include all of the following information: 23 a. The name and address of the property owner. 24 b. The name and address of the general contractor or 25 owner-builder. 26 c. The address of the property if the property can be 27 reasonably identified by an address or the name and a general 28 description of the location of the property if the property 29 cannot be reasonably identified by an address. 30 d. A legal description of the property. 31 e. The date work commenced. 32 f. The tax parcel identification number. 33 g. Any other information prescribed by the administrator 34 pursuant to rule. 35 -7- LSB 2236HV (3) 84 rh/nh 7/ 23

H.F. 633 2. If a general contractor or owner-builder fails to post 1 the required notice of commencement of work to the state 2 construction registry internet website pursuant to subsection 3 1, within ten days of commencement of the work on the property, 4 a subcontractor may post the notice in conjunction with the 5 filing of the required preliminary notice pursuant to section 6 572.13B. 7 3. At the time a notice of commencement of work is posted 8 on the state construction registry internet website, the 9 administrator shall send a copy of the owner notice described 10 in section 572.13 along with other relevant information to the 11 owner and to the property address, addressed to “owner”, as 12 prescribed by the administrator pursuant to rule. 13 4. A general contractor who fails to provide notice pursuant 14 to this section is not entitled to a lien and remedy provided 15 by this chapter. 16 5. This section applies only to residential construction 17 properties. 18 Sec. 10. NEW SECTION . 572.13B Preliminary notice —— 19 subcontractor —— residential construction. 20 1. A subcontractor shall post a preliminary notice to the 21 state construction registry internet website. A preliminary 22 notice posted before the balance due is paid to the general 23 contractor or the owner-builder is effective as to all labor, 24 service, equipment, and material furnished to the property by 25 the subcontractor. The preliminary notice shall contain all 26 of the following information: 27 a. The name of the owner. 28 b. The state construction registry number. 29 c. The name, address, and telephone number of the 30 subcontractor furnishing the labor, service, equipment, or 31 material. 32 d. The name and address of the person who contracted 33 with the claimant for the furnishing of the labor, service, 34 equipment, or material. 35 -8- LSB 2236HV (3) 84 rh/nh 8/ 23

H.F. 633 e. The name of the general contractor or owner-builder under 1 which the claimant is performing or will perform the work. 2 f. The address of the property or a description of the 3 location of the property. 4 g. Any other information required by the administrator 5 pursuant to rule. 6 2. At the time a preliminary notice is posted to the 7 state construction registry, the administrator shall send 8 notification to the owner, including the owner notice described 9 in section 572.13, subsection 1, and shall docket the mailing 10 of the notice on the state construction registry as prescribed 11 by the administrator pursuant to rule. Notices under this 12 section shall be sent to owner-builders. Upon request, the 13 administrator shall provide an affidavit of mailing at no cost 14 for the notice required under this section. 15 3. a. A mechanics’ lien perfected under this chapter 16 is enforceable only to the extent of the balance due the 17 general contractor or the owner-builder at the time of the 18 posting of the preliminary notice specified in subsection 1, 19 and, except for residential construction property owned by 20 an owner-builder, also is enforceable only to the extent of 21 the balance due the general contractor at the time the owner 22 actually receives the notice provided pursuant to subsection 2 23 or paragraph “b” . 24 b. (1) In any action to enforce a mechanics’ lien perfected 25 under this chapter against the owner, the subcontractor 26 bears the burden to prove by a preponderance of the evidence 27 that the owner received notice pursuant to subsection 2. A 28 subcontractor may satisfy the burden of proof by providing 29 separate notice to an owner by including but not limited to any 30 of the following means: 31 (a) By certified mail with return receipt. 32 (b) By personal service in the manner original notices are 33 required to be served. 34 (c) By actual notice with a signed receipt from the owner 35 -9- LSB 2236HV (3) 84 rh/nh 9/ 23

H.F. 633 acknowledging notice. 1 (2) If the subcontractor provides an affidavit of mailing, 2 the presumption is that the owner received the notice on the 3 fourth day of business for the post office after the notice was 4 sent and the burden of proof shifts from the subcontractor to 5 the owner to refute the presumption. 6 4. A subcontractor who fails to post a preliminary notice 7 pursuant to this section shall not be entitled to a lien and 8 remedy provided under this chapter. 9 5. This section applies only to residential construction 10 properties. 11 Sec. 11. Section 572.14, Code 2011, is amended by striking 12 the section and inserting in lieu thereof the following: 13 572.14 Liability to subcontractor after payment to general 14 contractor or owner-builder. 15 Except as provided in section 572.13B, payment to the 16 general contractor or owner-builder of any part or all of 17 the contract price of the building or improvement within 18 ninety days after the date on which the last of the materials 19 was furnished or the last of the labor was performed by a 20 subcontractor, does not relieve the owner from liability to the 21 subcontractor for the full value of any material furnished or 22 labor performed upon the building, land, or improvement if the 23 subcontractor posts a lien within ninety days after the date 24 on which the last of the materials was furnished or the last of 25 the labor was performed. 26 Sec. 12. Section 572.15, Code 2011, is amended to read as 27 follows: 28 572.15 Discharge of subcontractor’s mechanic’s lien —— bond. 29 A mechanic’s lien may be discharged at any time by the owner, 30 principal contractor, or intermediate subcontractor filing with 31 the clerk of the district court of the county in which the 32 property is located submitting a bond to the administrator in 33 twice the amount of the sum for which the claim for the lien 34 is filed, with surety or sureties, to be approved by the clerk 35 -10- LSB 2236HV (3) 84 rh/nh 10/ 23

H.F. 633 administrator , conditioned for the payment of any sum for which 1 the claimant may obtain judgment upon the claim. 2 Sec. 13. Section 572.16, Code 2011, is amended to read as 3 follows: 4 572.16 Rule of construction. 5 Nothing in this chapter shall be construed to require the 6 owner to pay a greater amount or at an earlier date than is 7 provided in the owner’s contract with the principal general 8 contractor, unless said the owner pays a part or all of the 9 contract price to the original general contractor before the 10 expiration of the ninety days allowed by law for the filing 11 posting of a mechanic’s lien by a subcontractor; provided 12 that in the case of an owner-occupied dwelling residential 13 construction , nothing in this chapter shall be construed to 14 require the owner to pay a greater amount or at an earlier date 15 than is provided in the owner’s contract with the principal 16 general contractor, unless the owner pays a part or all of 17 the contract price to the principal general contractor after 18 receipt of notice under section 572.14, subsection 2 the owner 19 receives notice pursuant to section 572.13B, subsection 2 or 20 subsection 3, paragraph “b” . 21 Sec. 14. Section 572.17, Code 2011, is amended to read as 22 follows: 23 572.17 Priority of mechanics’ liens between mechanics. 24 Mechanics’ liens shall have priority over each other in the 25 order of the filing posting of the statements or of accounts as 26 herein provided in section 572.8 . 27 Sec. 15. Section 572.18, subsections 1 and 3, Code 2011, are 28 amended to read as follows: 29 1. Mechanics’ liens filed posted by a principal general 30 contractor or subcontractor within ninety days after the date 31 on which the last of the material was furnished or the last 32 of the claimant’s labor was performed and for which notices 33 were properly posted to the state construction registry 34 internet website pursuant to sections 572.13A and 572.13B 35 -11- LSB 2236HV (3) 84 rh/nh 11/ 23

H.F. 633 shall be superior to all other liens which may attach to or 1 upon a building or improvement and to the land upon which it 2 is situated, except liens of record prior to the time of the 3 original commencement of the claimant’s work or the claimant’s 4 improvements, except as provided in subsection 2 . 5 3. The rights of purchasers, encumbrancers, and other 6 persons who acquire interests in good faith, for a valuable 7 consideration, and without notice of a lien perfected pursuant 8 to this chapter , are superior to the claims of all general 9 contractors or subcontractors who have perfected their liens 10 more than ninety days after the date on which the last of the 11 claimant’s material was furnished or the last of the claimant’s 12 labor was performed. 13 Sec. 16. Section 572.22, Code 2011, is amended to read as 14 follows: 15 572.22 Record of claim. 16 The clerk of the court administrator shall endorse upon 17 every claim for a mechanic’s lien filed in the clerk’s office 18 posted to the state construction registry internet website the 19 date and hour of filing posting and make an abstract thereof in 20 the mechanic’s lien book kept for that purpose . Said book Each 21 claim shall be properly indexed and shall contain the following 22 items concerning each claim : 23 1. The name of the person by whom filed posted . 24 2. The date and hour of filing posting . 25 3. The amount thereof. 26 4. The name of the person against whom filed posted . 27 5. The legal description of the property to be charged 28 therewith . 29 6. The tax parcel identification number of the property to 30 be charged. 31 Sec. 17. Section 572.23, Code 2011, is amended to read as 32 follows: 33 572.23 Acknowledgment of satisfaction of claim. 34 1. When a mechanic’s lien is satisfied by payment of the 35 -12- LSB 2236HV (3) 84 rh/nh 12/ 23

H.F. 633 claim, the claimant shall acknowledge satisfaction thereof upon 1 the mechanic’s lien book, or otherwise in writing, and, if the 2 claimant neglects to do so for thirty days after demand in 3 writing is personally served upon the claimant, the claimant 4 shall forfeit and pay twenty-five dollars to the owner or , 5 general contractor, or owner-builder and be liable to any 6 person injured to the extent of the injury. 7 2. If acknowledgment of satisfaction is not filed 8 acknowledged within thirty days after service of the demand in 9 writing, the party serving the demand or causing the demand to 10 be served may file for record with the clerk of the district 11 court administrator a copy of the demand with proofs of service 12 attached and endorsed and, in case of service by publication, 13 a personal affidavit that personal service could not be made 14 within this state. Upon completion of the requirements of this 15 subsection , the record shall be constructive notice to all 16 parties of the due forfeiture and cancellation of the lien. 17 Upon the filing of the demand with the required attachments, 18 the clerk of the district court administrator shall mail a 19 file-stamped date-stamped copy of the demand to both parties. 20 Sec. 18. Section 572.24, subsection 2, Code 2011, is amended 21 to read as follows: 22 2. An action to challenge a mechanic’s lien may be 23 commenced in the district court or small claims court if the 24 amount of the lien is within jurisdictional limits. Any 25 permissible claim or counterclaim meeting subject matter and 26 jurisdictional requirements may be joined with the action. 27 The court shall make written findings regarding the lawful 28 amount and the validity of the mechanic’s lien. In addition 29 to any other appropriate order, the court may enter judgment 30 on a permissibly joined claim or counterclaim. If the court 31 determines that the mechanic’s lien is invalid, valid for a 32 lesser amount, frivolous, fraudulent, forfeited, expired, or 33 for any other reason unenforceable, the clerk of the district 34 court shall make an entry of record to the mechanic’s lien book 35 -13- LSB 2236HV (3) 84 rh/nh 13/ 23

H.F. 633 submit the ruling to the administrator who shall make a posting 1 to the state construction registry internet website regarding 2 the proper amount of the lien or, if warranted, canceling the 3 lien. 4 Sec. 19. Section 572.28, subsection 2, Code 2011, is amended 5 to read as follows: 6 2. If an action is not filed within thirty days after demand 7 to commence action is served, the party serving the demand or 8 causing the demand to be served may file for record with the 9 clerk of the district court administrator a copy of the demand 10 with proofs of service attached and endorsed and, in case of 11 service by publication, a personal affidavit that personal 12 service could not be made within this state. Upon completion 13 of the requirements of this subsection , the record shall be 14 constructive notice to all parties of the due forfeiture and 15 cancellation of the lien. Upon the filing of the demand with 16 the required attachments, the clerk of the district court 17 administrator shall mail a file-stamped date-stamped copy of 18 the demand to both parties. 19 Sec. 20. Section 572.30, Code 2011, is amended to read as 20 follows: 21 572.30 Action by subcontractor or owner against general 22 contractor or owner-builder . 23 Unless otherwise agreed, a principal general contractor 24 or owner-builder who engages a subcontractor to supply 25 labor or materials or both for improvements, alterations or 26 repairs to a specific owner-occupied dwelling residential 27 construction property shall pay the subcontractor in full for 28 all labor and materials supplied within thirty days after 29 the date the principal general contractor or owner-builder 30 receives full payment from the owner. If a principal general 31 contractor or owner-builder fails without due cause to pay a 32 subcontractor as required by this section , the subcontractor, 33 or the owner by subrogation, may commence an action against 34 the general contractor or owner-builder to recover the amount 35 -14- LSB 2236HV (3) 84 rh/nh 14/ 23

H.F. 633 due. Prior to commencing an action to recover the amount 1 due, a subcontractor, or the owner by subrogation, shall give 2 notice of nonpayment of the cost of labor or materials to 3 the principal general contractor or owner-builder paid for 4 the improvement. Notice of nonpayment must be in writing, 5 delivered in a reasonable manner, and in terms that reasonably 6 identify the real estate improved and the nonpayment complained 7 of. In an action to recover the amount due a subcontractor, 8 or the owner by subrogation, under this section , the court 9 in addition to actual damages, shall award a successful 10 plaintiff exemplary damages against the general contractor 11 or owner-builder in an amount not less than one percent 12 and not exceeding fifteen percent of the amount due the 13 subcontractor, or the owner by subrogation, for the labor and 14 materials supplied, unless the principal general contractor or 15 owner-builder does one or both of the following, in which case 16 no exemplary damages shall be awarded: 17 1. Establishes that all proceeds received from the person 18 making the payment have been applied to the cost of labor or 19 material furnished for the improvement. 20 2. Within fifteen days after receiving notice of nonpayment 21 the principal general contractor or owner-builder gives a 22 bond or makes a deposit with the clerk of the district court 23 administrator , in an amount not less than the amount necessary 24 to satisfy the nonpayment for which notice has been given 25 under this section , and in a form approved by a judge of the 26 district court, to hold harmless the owner or person having 27 the improvement made from any claim for payment of anyone 28 furnishing labor or material for the improvement, other than 29 the principal general contractor or owner-builder . 30 Sec. 21. Section 572.31, Code 2011, is amended to read as 31 follows: 32 572.31 Cooperative and condominium housing. 33 A lien arising under this chapter as a result of the 34 construction of an apartment house or apartment building which 35 -15- LSB 2236HV (3) 84 rh/nh 15/ 23

H.F. 633 is owned on a cooperative basis under chapter 499A , or which is 1 submitted to a horizontal property regime under chapter 499B , 2 is not enforceable, notwithstanding any contrary provision 3 of this chapter , as against the interests of an owner in an 4 owner-occupied dwelling a unit contained in the apartment 5 house or apartment building acquired in good faith and for 6 valuable consideration, unless a lien statement specifically 7 describing the dwelling unit is filed under section 572.8 8 within the applicable time period specified in section 572.9 , 9 but determined from the date on which the last of the material 10 was supplied or the last of the labor was performed in the 11 construction of that dwelling unit. 12 Sec. 22. Section 572.32, Code 2011, is amended to read as 13 follows: 14 572.32 Attorney fees —— remedies. 15 1. In a court action to enforce a mechanic’s lien, if 16 the plaintiff furnished labor or materials directly to the 17 defendant, a prevailing plaintiff may be awarded reasonable 18 attorney fees. 19 2. In a court action to challenge a mechanic’s lien filed 20 posted on an owner-occupied dwelling a residential construction 21 property , if the person challenging the lien prevails, the 22 court may award reasonable attorney fees and actual damages. 23 If the court determines that the mechanic’s lien was filed 24 posted in bad faith or the supporting affidavit was materially 25 false, the court shall award the owner reasonable attorney fees 26 plus an amount not less than five hundred dollars or the amount 27 of the lien, whichever is less. 28 Sec. 23. Section 572.33, Code 2011, is amended to read as 29 follows: 30 572.33 Requirement of notification for commercial 31 construction . 32 1. The notification requirements in this section apply only 33 to commercial construction. 34 1. 2. A person furnishing labor or materials to a 35 -16- LSB 2236HV (3) 84 rh/nh 16/ 23

H.F. 633 subcontractor shall not be entitled to a lien under this 1 chapter unless the person furnishing labor or materials does 2 all of the following: 3 a. Notifies the principal general contractor or 4 owner-builder in writing with a one-time notice containing 5 the name, mailing address, and telephone number of the 6 person furnishing the labor or materials, and the name of the 7 subcontractor to whom the labor or materials were furnished, 8 within thirty days of first furnishing labor or materials for 9 which a lien claim may be made. Additional labor or materials 10 furnished by the same person to the same subcontractor for 11 use in the same construction project shall be covered by this 12 notice. 13 b. Supports the lien claim with a certified statement that 14 the principal general contractor or owner-builder was notified 15 in writing with a one-time notice containing the name, mailing 16 address, and telephone number of the person furnishing the 17 labor or materials, and the name of the subcontractor to whom 18 the labor or materials were furnished, within thirty days 19 after the labor or materials were first furnished, pursuant to 20 paragraph “a” . 21 2. This section shall not apply to a mechanic’s lien on 22 single-family or two-family dwellings occupied or used or 23 intended to be occupied or used for residential purposes. 24 3. Notwithstanding other provisions of this chapter , a 25 principal general contractor or owner-builder shall not be 26 prohibited from requesting information from a subcontractor 27 or a person furnishing labor or materials to a subcontractor 28 regarding payments made or payments to be made to a person 29 furnishing labor or materials to a subcontractor. 30 Sec. 24. NEW SECTION . 572.33A Liability of owner to general 31 contractor —— commercial construction. 32 An owner of a building, land, or improvement upon which 33 a mechanic’s lien of a subcontractor may be filed, is not 34 required to pay the general contractor for compensation for 35 -17- LSB 2236HV (3) 84 rh/nh 17/ 23

H.F. 633 work done or material furnished for the building, land, or 1 improvement until the expiration of ninety days after the 2 completion of the building or improvement unless the general 3 contractor furnishes to the owner one of the following: 4 1. Receipts and waivers of claims for mechanics’ liens, 5 signed by all persons who furnished material or performed labor 6 for the building, land, or improvement. 7 2. A good and sufficient bond to be approved by the owner, 8 conditioned that the owner shall be held harmless from any 9 loss which the owner may sustain by reason of the filing of 10 mechanics’ liens by subcontractors. 11 Sec. 25. NEW SECTION . 572.34 State construction registry 12 —— residential construction. 13 1. A state construction registry is created and shall be 14 administered by the administrator. The administrator shall 15 adopt rules pursuant to chapter 17A for the creation and 16 administration of the registry. 17 2. The state construction registry shall be accessible 18 to the general public through the administrator’s internet 19 website. 20 3. The registry shall be indexed by owner name, general 21 contractor name, state construction registry number, property 22 address, legal description, tax parcel identification number, 23 and any other identifier considered appropriate as determined 24 by the administrator pursuant to rule. 25 4. A general contractor, owner-builder, or subcontractor 26 who posts fictitious, forged, or false information to the 27 state construction registry shall be subject to a penalty as 28 determined by the administrator by rule in addition to all 29 other penalties and remedies available under applicable law. 30 5. A person may post a correction statement with respect to 31 a record indexed in the state construction registry internet 32 website if the person believes the record is inaccurate or 33 wrongfully posted. 34 6. The administrator shall charge and collect fees as 35 -18- LSB 2236HV (3) 84 rh/nh 18/ 23