Attorneys’ Fees Now Available for Residential Mechanics’ Lien Foreclosures

In early 2020, the Iowa Supreme Court ruled that contractors who have a mechanics’ lien on a residential property cannot recover attorneys’ fees from the sale of the homestead. We explained in a prior blog about how that Supreme Court decision severely limited a contractor’s effective remedies under the mechanics’ lien statute. In our blog, we also noted that the ruling made clear that in the future, the legislature could address the issues with recovering attorneys’ fees from a mechanics’ lien on a residential property that is a homestead.

The legislature took note.

At the tail end of a unique session disrupted by COVID-19, the Iowa Legislature passed a bill that makes clear a contractor can recover its attorneys’ fees from the mechanics’ lien. Although this bill (SF 458) is not yet law, it is expected that Governor Reynolds will sign it into law soon. Once signed, new § 561.21 will provide a tool for Iowa’s contractors to adequately and effectively enforce mechanics’ liens on residential properties.

What has not changed, though, is the importance of contractors’ supplying the required notices to residential property owners. See our other blogs here (necessity of commencement notice), here (2013 changes to mechanics’ lien statute), and here (5 years later, a look at the 2013 changes) for additional information about Iowa’s mechanics’ lien statute for residential properties. After all, the Iowa legislature’s action will not help contractors who fail to properly protect their mechanics’ lien rights.