Borst Brothers Construction, Inc. v. Finance of America Commercial, LLC
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The Supreme Court affirmed the decision of the court of appeals and the district court on the questions of lien validity and priority in this mechanics' lien case, holding that there was no error.
Law requires that general contractors and owner-builders post a notice of commencement of work to Iowa's centralized, internet-based registry for mechanics' liens within ten days of starting work on a residential construction project. In the instant case, the owner-builder did not post notices of commencement on the registry for the five residential lots that it was developing, but two subcontractors did so several months after construction had begun. When the project went into default, a priority dispute arose between the two subcontractors and the project's commercial lender. The district court and court of appeals found for the subcontractors. The Supreme Court affirmed, holding (1) Iowa Code 572.13 did not change the principle that mechanics' liens will, in some circumstances, have priority over previously-recorded mortgages; and (2) the ten-day deadline for posting the notice of commencement to the registry applies to general contractors and owner-builders but not to subcontractors.
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