On Apr. 8, ARK LEG enacted bill related to construction funding liens.
ARK LEG enacted bill HB 1271 to amend law concerning mechanics and materialmen’s liens; to clarify priority of liens in mortgage construction loans and for other purposes.
Amended Arkansas CodeARK LEG 18-4-44-110(b)(1), Preference over prior liens.
Legislative Provisions
Person who acquires mortgage or other security instrument that provides a security interest for funding construction or repair of the improvement may rely on affidavit.
Affidavit made by licensed appraiser, architect, surveyor, engineer if inspected property and work not been commenced or materials placed at site at the time of inspection.
If inspection occurs and affidavit filed within 4 business days before, within 4 business days after filing of mortgage, other security instrument that provides security interest.
When mortgage or other security interest for funding construction or repair encumber property which residential single one-to-four family unit located or will be constructed.
Person who made affidavit may be employee, designee of lender, licensed title agent.
If construction commences before recordation of mortgage, other security instrument that provides security interest for funding construction or repair of the improvement,
Only liens for providing labor, materials, supplies before recordation will have priority over the mortgage or other security instrument that provides a security interest.
Legislative History
On Jan, 27, 2025, bill introduced in House; on Jan. 30, 2025, bill passed the House.
On Jan. 30, 2025, bill introduced in Senate; on Mar. 19, 2025, bill passed the Senate.
On Apr. 1, 2025, House concurred Senate amendments; on Apr. 2, 2025, enrolled
On Apr. 2, 2025, delivered to governor; on Apr. 8, 2025, governor approved, Act 479.
Effectiveness
Act effective 91 days after legislature adjourned sine die (May 5), so Aug. 4, 2025.
Regulators
ARK LEG
Entity Types
Bank; MG Orig; Servicer; Thrift
Reference
Bill HB1271, Act 479, 4/8/2025; Citation: ARK LEG 18-4-44-110;
