HOW TO FILE AN ALASKA MECHANICS LIEN (Alaska Mechanics Lien and Notice Requirement Overview)
Mechanics liens are a crucial component of the construction payment ecosystem, and a powerful tool to make sure construction companies get paid what they deserve. However, the requirements surrounding mechanics liens and notices are complex and confusing. This guide sets out and simplifies the rules
Who Can File?You are qualified to file a mechanics lien in Alaska if you fall into one of the following categories outlined by Alaska Stat. Sec. 34.35.050:
1. a company or individual who performed labor for improvement of real property,
2. union trust and trustees, 3) materialmen who furnished materials to the site,
3. equipment supplier who supplied equipment to the site,
4. architect, surveyor, or engineer, or
5. general contractor.
It seems, although there are no Alaska court decisions on point, that a materialman or subcontractor must have contracted with a subcontractor or higher - not a sub-sub - in order to have lien rights. Also, a material or equipment supplier is required to have supplied the material or equipment to the project site.
According to Alaska law, there is no licensing requirement for a person otherwise entitled to a mechanics lien to assert those lien rights.
SENDING NOTICE TO OWNERA preliminary notice is not required to file a valid Claim of Lien in Alaska. However, a Notice of Lien Rights may be filed and served on the property owner by a potential lien claimant prior to providing labor or materials to the project. This notice makes enforcement of the lien easier and can extend the time the lien claimant has to file the lien.
Who Must Receive the Notice?
A person may give Notice of Right to Lien to the owner or owner's agent before furnishing labor, or material to the project. This notice works to transfer the burden of proof to the owner in a foreclosure action and entitles the person giving notice to advance notice of the owner's filing of a Notice of Completion.
Timing of Notice to Owner
If a Notice of Right to Lien is not given prior to first furnishing materials or labor to the project, the lien claimant will not reap the benefits of the transfer of the burden of proof, and advance notice of the owner's recording of a Notice of Completion. However, it may still be filed at any time up to 15 days after the owner records a Notice of Completion, and will work to assure the lien claimant the full 120 days to file his lien.
Content of Notice
When utilized, a Notice of Right to Lien must be recorded in the same manner as recording an Alaska mechanics lien. Those content requirements are explained below in the Contents of an Alaska Mechanics Lien section.
How to Send the Notice
Upon filing, notice should be sent either by certified mail return receipt requested, or personal delivery with the recipient's signature acknowledging receipt of the document. The Notice of Right to Lien must be "given" to the owner or owner's agent. Alaska law defines "given" in this instance as either mailing by certified mail return receipt requested, or personal delivery with the recipient's signature acknowledging receipt of the document.
When is Notice Effective?
The notice is considered delivered when it is actually received.
Recording the Notice
Alaska law also allows for the recording of the Notice of Right to Lien rather than just "giving" the notice to the owner. The main benefit of recordation of the Notice of Right to Lien, even after labor or materials have been furnished to the project, is to assure the lien claimant of the full 120 days to record his lien if the owner records a Notice of Completion.
FILING A MECHANICS LIENContents of an Alaska Mechanics Lien
According to Alaska Stat.34.35.070, information to be included in an Alaska mechanics lien includes:
1. a legal description sufficient for identification of the real property being liened;
2. the name of the property owner;
3. the name and address of the claimant;
4. the name and address of the party who contracted with the claimant;
5. a general description of the labor, materials, services, or equipment furnished and the contract price of the labor, materials, services or equipment
6. the amount due to the claimant for the labor, materials, services or equipment
7. the date the last labor, materials, services or equipment were furnished
Deadline to File
If a Notice of Completion is not recorded by the property owner, the Claim of Lien must be recorded no later than 120 days after the lien claimant completes the construction contract, or ceases to furnish labor, materials, services, or equipment.
If a Notice of Completion is recorded by the property owner, and the lien claimant has received advance notification of the date that the Notice of Completion is recorded, or the lien claimant has not given a notice of right to lien, the Claim of Lien or Notice of Right to Lien must be recorded within 15 days after the Notice of Completion is recorded.
If the lien claimant records a Notice of Right to Lien within the statutorily specified time period, or has given notice of right to lien but has not received advance notice of the date the Notice of Completion is recorded by the property owner, he has 120 days to record his Claim of Lien.
Alaska law specifically defines the amount able to be claimed in a lien as "the contract amount," so anything included in the contract price is allowed to be included in the lien amount. Anything not included in the contract price is not allowed to be included. Further, the inclusion of an improper items in the Claim of Lien voids that lien.
Deadline to Enforce Lien
Alaska law requires that a mechanics lien be enforced within 6 months after the date the Claim of Lien was recorded. Alaska allows a lien to be extended for an additional 6 months if an Extension Notice is recorded in the same recording office as the original lien within the original 6-month period.
As noted in the "Contents of Alaska Mechanics Lien" section above, an Alaska mechanics lien must include a legal property description. However, courts have - at least occasionally - held that a description in the notice is sufficient. Depending on the circumstances and the place where the notice is filed or recorded, it notifies parties dealing with the property that a lien is claimed thereon. However, as the statutory language requires a legal property description, best practices would be to include a legal property description on in your lien.
An Alaska mechanics lien must be notarized.
CONCLUSIONA mechanics lien can be a powerful tool to get paid on construction projects. But, the efficacy of the tool is dependent on the lien being valid. Following the necessary notice requirements and procedures from the beginning of the project, and following the lien filing rules in order to make sure the lien is valid greatly increase a lien's ability to result in payment.
A potential lien claimant should make sure to give careful attention to the requirements if filing themselves, utilize software products to manage lien rights as an intermediate step, or obtain assistance from attorneys if they need legal guidance or assistance.