Preference over prior liens — Exception

Ark. Code Ann. § 18-44-110 — under Mechanics' and Materialmen's Liens.

Ark. Code Ann. § 18-44-110

(a) (1) The liens for labor performed or material or fixtures furnished, as provided for in this subchapter, shall have equal priority toward each other without regard to the date of filing the account or lien or the date when the particular labor or material was performed or furnished. All such liens shall date from the time that the construction or repair first commenced.(2) Construction or repair commences when there is a visible manifestation of activity on real estate that would lead a reasonable person to believe that construction or repair of an improvement to the real estate has begun or will soon begin, including, but not limited to, the following:(A) Delivery of a significant amount of lumber, bricks, pipe, tile, or other building material to the site;(B) Grading or excavating the site;(C) Laying out lines or grade stakes; or(D) Demolition in an existing structure.(3) In all cases in which a sale shall be ordered and the property sold, and the proceeds arising from the sale are not sufficient to discharge in full all the liens against the property without reference to the date of filing the account or lien, the proceeds shall be paid pro rata on the respective liens.

(1) The liens for labor performed or material or fixtures furnished, as provided for in this subchapter, shall have equal priority toward each other without regard to the date of filing the account or lien or the date when the particular labor or material was performed or furnished. All such liens shall date from the time that the construction or repair first commenced.

(2) Construction or repair commences when there is a visible manifestation of activity on real estate that would lead a reasonable person to believe that construction or repair of an improvement to the real estate has begun or will soon begin, including, but not limited to, the following:(A) Delivery of a significant amount of lumber, bricks, pipe, tile, or other building material to the site;(B) Grading or excavating the site;(C) Laying out lines or grade stakes; or(D) Demolition in an existing structure.

(A) Delivery of a significant amount of lumber, bricks, pipe, tile, or other building material to the site;

(B) Grading or excavating the site;

(C) Laying out lines or grade stakes; or

(D) Demolition in an existing structure.

(3) In all cases in which a sale shall be ordered and the property sold, and the proceeds arising from the sale are not sufficient to discharge in full all the liens against the property without reference to the date of filing the account or lien, the proceeds shall be paid pro rata on the respective liens.

(b) (1) (A) The liens for labor performed or materials or fixtures furnished, as provided for in this subchapter, shall attach to the improvement on which the labor was performed or the materials or fixtures were furnished subject to any encumbrance existing on the real estate prior to the commencement of construction or repair of the improvement.(B) (i) In all cases in which the encumbrance was given for the purpose of funding construction or repair of the improvement, that lien shall have priority over all liens given by this subchapter.(ii) (a) A person who acquires or intends to acquire a mortgage or other security instrument that provides a security interest for the purpose of funding construction or repair of the improvement may conclusively rely on an affidavit made by a licensed appraiser, architect, surveyor, or engineer if the licensed appraiser, architect, surveyor , or engineer has inspected the property at a specified time and work had not been commenced or materials placed at its site at the time of the inspection, if the inspection occurs and the affidavit is filed within four (4) business days before or within four (4) business days after the filing of the mortgage or other security instrument that provides a security interest. (b) When a mortgage or other security interest for the purpose of funding construction or repair of the improvement will encumber property on which a residential structure that is a single one-to-four family unit is located or will be constructed, the person who made the affidavit described in subdivision (b)(1)(B)(ii)(a) of this section may be an employee or designee of the lender or licensed title agent.(iii) The facts in an affidavit filed under subdivision (b)(1)(B)(ii) of this section: (a) Shall be considered true at the time of the inspection; and (b) Shall remain true at the time of the filing of the mortgage or other security instrument that provides a security interest.(iv) The correctness of the facts contained in an affidavit filed under subdivision (b)(1)(B)(ii) of this section shall not be controverted to affect the priority of the rights of the person to whom or for whom it is given, unless actual fraud by that person is proved.(v) A person who provides a false affidavit under subdivision (b)(1)(B)(ii) of this section shall be responsible for any loss or damage suffered by a person whose rights are adversely affected.(C) Notwithstanding subsection (a) of this section, in the event that construction commences before the recordation of the mortgage or other security instrument that provides a security interest for the purpose of funding construction or repair of the improvement, only the liens for providing labor, materials, or supplies before the recordation of the mortgage or other security instrument that provides a security interest shall have priority over the mortgage or other security instrument that provides a security interest.(2) The liens, as provided for in this subchapter, shall be enforced by foreclosure, as further provided for in this subchapter, and the property ordered sold subject to the lien of the prior encumbrance on the real estate.

(1) (A) The liens for labor performed or materials or fixtures furnished, as provided for in this subchapter, shall attach to the improvement on which the labor was performed or the materials or fixtures were furnished subject to any encumbrance existing on the real estate prior to the commencement of construction or repair of the improvement.(B) (i) In all cases in which the encumbrance was given for the purpose of funding construction or repair of the improvement, that lien shall have priority over all liens given by this subchapter.(ii) (a) A person who acquires or intends to acquire a mortgage or other security instrument that provides a security interest for the purpose of funding construction or repair of the improvement may conclusively rely on an affidavit made by a licensed appraiser, architect, surveyor, or engineer if the licensed appraiser, architect, surveyor , or engineer has inspected the property at a specified time and work had not been commenced or materials placed at its site at the time of the inspection, if the inspection occurs and the affidavit is filed within four (4) business days before or within four (4) business days after the filing of the mortgage or other security instrument that provides a security interest. (b) When a mortgage or other security interest for the purpose of funding construction or repair of the improvement will encumber property on which a residential structure that is a single one-to-four family unit is located or will be constructed, the person who made the affidavit described in subdivision (b)(1)(B)(ii)(a) of this section may be an employee or designee of the lender or licensed title agent.(iii) The facts in an affidavit filed under subdivision (b)(1)(B)(ii) of this section: (a) Shall be considered true at the time of the inspection; and (b) Shall remain true at the time of the filing of the mortgage or other security instrument that provides a security interest.(iv) The correctness of the facts contained in an affidavit filed under subdivision (b)(1)(B)(ii) of this section shall not be controverted to affect the priority of the rights of the person to whom or for whom it is given, unless actual fraud by that person is proved.(v) A person who provides a false affidavit under subdivision (b)(1)(B)(ii) of this section shall be responsible for any loss or damage suffered by a person whose rights are adversely affected.(C) Notwithstanding subsection (a) of this section, in the event that construction commences before the recordation of the mortgage or other security instrument that provides a security interest for the purpose of funding construction or repair of the improvement, only the liens for providing labor, materials, or supplies before the recordation of the mortgage or other security instrument that provides a security interest shall have priority over the mortgage or other security instrument that provides a security interest.

(A) The liens for labor performed or materials or fixtures furnished, as provided for in this subchapter, shall attach to the improvement on which the labor was performed or the materials or fixtures were furnished subject to any encumbrance existing on the real estate prior to the commencement of construction or repair of the improvement.

(B) (i) In all cases in which the encumbrance was given for the purpose of funding construction or repair of the improvement, that lien shall have priority over all liens given by this subchapter.(ii) (a) A person who acquires or intends to acquire a mortgage or other security instrument that provides a security interest for the purpose of funding construction or repair of the improvement may conclusively rely on an affidavit made by a licensed appraiser, architect, surveyor, or engineer if the licensed appraiser, architect, surveyor , or engineer has inspected the property at a specified time and work had not been commenced or materials placed at its site at the time of the inspection, if the inspection occurs and the affidavit is filed within four (4) business days before or within four (4) business days after the filing of the mortgage or other security instrument that provides a security interest. (b) When a mortgage or other security interest for the purpose of funding construction or repair of the improvement will encumber property on which a residential structure that is a single one-to-four family unit is located or will be constructed, the person who made the affidavit described in subdivision (b)(1)(B)(ii)(a) of this section may be an employee or designee of the lender or licensed title agent.(iii) The facts in an affidavit filed under subdivision (b)(1)(B)(ii) of this section: (a) Shall be considered true at the time of the inspection; and (b) Shall remain true at the time of the filing of the mortgage or other security instrument that provides a security interest.(iv) The correctness of the facts contained in an affidavit filed under subdivision (b)(1)(B)(ii) of this section shall not be controverted to affect the priority of the rights of the person to whom or for whom it is given, unless actual fraud by that person is proved.(v) A person who provides a false affidavit under subdivision (b)(1)(B)(ii) of this section shall be responsible for any loss or damage suffered by a person whose rights are adversely affected.

(i) In all cases in which the encumbrance was given for the purpose of funding construction or repair of the improvement, that lien shall have priority over all liens given by this subchapter.

(ii) (a) A person who acquires or intends to acquire a mortgage or other security instrument that provides a security interest for the purpose of funding construction or repair of the improvement may conclusively rely on an affidavit made by a licensed appraiser, architect, surveyor, or engineer if the licensed appraiser, architect, surveyor , or engineer has inspected the property at a specified time and work had not been commenced or materials placed at its site at the time of the inspection, if the inspection occurs and the affidavit is filed within four (4) business days before or within four (4) business days after the filing of the mortgage or other security instrument that provides a security interest. (b) When a mortgage or other security interest for the purpose of funding construction or repair of the improvement will encumber property on which a residential structure that is a single one-to-four family unit is located or will be constructed, the person who made the affidavit described in subdivision (b)(1)(B)(ii)(a) of this section may be an employee or designee of the lender or licensed title agent.

(a) A person who acquires or intends to acquire a mortgage or other security instrument that provides a security interest for the purpose of funding construction or repair of the improvement may conclusively rely on an affidavit made by a licensed appraiser, architect, surveyor, or engineer if the licensed appraiser, architect, surveyor , or engineer has inspected the property at a specified time and work had not been commenced or materials placed at its site at the time of the inspection, if the inspection occurs and the affidavit is filed within four (4) business days before or within four (4) business days after the filing of the mortgage or other security instrument that provides a security interest.

(b) When a mortgage or other security interest for the purpose of funding construction or repair of the improvement will encumber property on which a residential structure that is a single one-to-four family unit is located or will be constructed, the person who made the affidavit described in subdivision (b)(1)(B)(ii)(a) of this section may be an employee or designee of the lender or licensed title agent.

(iii) The facts in an affidavit filed under subdivision (b)(1)(B)(ii) of this section: (a) Shall be considered true at the time of the inspection; and (b) Shall remain true at the time of the filing of the mortgage or other security instrument that provides a security interest.

(a) Shall be considered true at the time of the inspection; and

(b) Shall remain true at the time of the filing of the mortgage or other security instrument that provides a security interest.

(iv) The correctness of the facts contained in an affidavit filed under subdivision (b)(1)(B)(ii) of this section shall not be controverted to affect the priority of the rights of the person to whom or for whom it is given, unless actual fraud by that person is proved.

(v) A person who provides a false affidavit under subdivision (b)(1)(B)(ii) of this section shall be responsible for any loss or damage suffered by a person whose rights are adversely affected.

(C) Notwithstanding subsection (a) of this section, in the event that construction commences before the recordation of the mortgage or other security instrument that provides a security interest for the purpose of funding construction or repair of the improvement, only the liens for providing labor, materials, or supplies before the recordation of the mortgage or other security instrument that provides a security interest shall have priority over the mortgage or other security instrument that provides a security interest.

(2) The liens, as provided for in this subchapter, shall be enforced by foreclosure, as further provided for in this subchapter, and the property ordered sold subject to the lien of the prior encumbrance on the real estate.

(c) The lien for labor performed and materials or fixtures furnished, as provided for in this subchapter, shall have priority over all other encumbrances that attach to the real estate or improvements thereon subsequent to commencement of construction or repair.