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HB 1271

MABAS CONT APPROPRIATION

104th Regular Session Introduced by Katie Stuart and 1 co-sponsor

HB 1271 clarifies lien priorities for construction projects in Arkansas, ensuring contractors are protected and lenders can rely on accurate affidavits during financing.

Added Co-Sponsor Rep. Nabeela Syed
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WeVote Research Nonpartisan
Bill Summary · HB 1271

Summary of House Bill 1271

Bill Number: HB 1271
Title: Relating to Capital Improvement Projects for the Benefit of the Eleventh Representative District
Status: Referred to FIN, referral sheet 4
Introduced: January 27, 2025
Classification: Bill
Subject: Appropriation ($), CIP, Eleventh Representative District

Purpose and Intent

House Bill 1271 aims to amend existing laws concerning mechanics' and materialmen's liens in the state of Arkansas. The primary intent of the bill is to clarify the priority of these liens in relation to mortgage construction loans, thereby providing more certainty and protection for those involved in construction and repair projects.

Key Provisions

The bill includes several significant amendments to Arkansas Code § 18-44-110, which governs lien attachment and priority:

  1. Lien Attachment and Priority:

    • Liens for labor and materials will attach to the improvement in preference to any existing encumbrance on the real estate prior to construction or repair.
    • If a prior encumbrance was specifically for funding construction or repair, that lien will take priority over all other liens.

  2. Affidavit Reliance:

    • Lenders can rely on affidavits from licensed appraisers, architects, surveyors, or engineers, confirming that no work or materials were present at the time of their inspection. This affidavit must be filed within four business days before or after the mortgage filing.

  3. Affidavit Validity:

    • The facts in the affidavit are considered true at the time of inspection and remain valid at the time of mortgage filing, unless actual fraud is proven.

  4. Consequences of False Affidavits:

    • Individuals providing false affidavits will be liable for any losses incurred by parties adversely affected by the misrepresentation.

  5. Priority of Liens:

    • If construction begins before the mortgage is recorded, only liens for labor and materials provided before the mortgage recording will have priority over the mortgage.

Affected Parties

This bill primarily affects:
- Contractors and subcontractors providing labor and materials for construction projects.
- Lenders and financial institutions involved in mortgage and construction financing.
- Property owners and developers in the Eleventh Representative District who are undertaking construction or renovation projects.

Procedural Timeline

  • January 27, 2025: Bill introduced and referred to the Committee on Insurance & Commerce.
  • February 4, 2025: Committee recommended the bill do pass.
  • March 13, 2025: Amendment #1 adopted, and the bill was reported correctly engrossed.
  • March 19, 2025: Bill passed third reading in the Senate and returned to the House.
  • April 1, 2025: Senate amendment concurred in, and the bill was ordered to be enrolled.
  • April 2, 2025: Bill correctly enrolled and transmitted to the Governor's Office.
  • April 8, 2025: Notification that HB 1271 is now Act 479.

This summary provides an overview of HB 1271, highlighting its purpose, key provisions, affected parties, and the legislative timeline. The bill seeks to enhance the clarity and enforceability of mechanics' and materialmen's liens, thereby supporting the construction industry in Arkansas.

Compiled from official sources — confirm details with the bill’s official record.

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