When payment disputes arise and you want to recover payment from a difficult client, your best chance of doing so is filing a mechanics lien.
A mechanics lien attaches a note to a property’s records warning potential buyers and financiers about the outstanding debts that might complicate matters if they decide to purchase or fund the property. This, in turn, incentivizes property owners to settle the debts instead of having a mechanics lien recorded against their property.
Filing a mechanics lien, however, is no easy task. The process is tedious, and there are specific requirements that you must meet if you want your mechanics lien to be considered valid. In Alaska, for example, mechanics lien deadlines vary depending on your compliance with other notice regulations.
This guide will answer your questions regarding filing a mechanics lien in Alaska, from who can file one, when filing should be done, all the way to what you should keep in mind when you decide to file it.
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Who can file a mechanics lien in Alaska?
The following parties have lien rights, according to Alaska’s lien statutes’ Section 34-35-050:
- general contractors
- persons who perform labor upon real property at the request of a property owner
- trustees of an employee benefit trust, provided they have a direct contract with the owner for direct payments into the trust
- material suppliers who have a direct contract with a property owner
- equipment suppliers or lessors who have a direct contract with a property owner
- persons who perform construction services such as preparation of plans, surveys, or architectural or engineering drawings, as long as they have a contract with a property owner
Note that material and equipment suppliers must have their supplies delivered to the real property in order for them to have lien rights.
Serving a preliminary notice in Alaska
Serve a preliminary notice is not required in Alaska. However, you are still encouraged to serve this notice, also known as the Notice of Right to Lien.
By serving a valid Notice of Right to Lien, you are securing a legal proof that the property owners have consented to your participation in a project. If payment issues arise, you can prove to the court that the owners know of their obligation to pay you. The burden of proof, therefore, falls on property owners if they want to contest your lien rights.
Serving a Notice of Right to Lien may also extend your deadline for recording a mechanics lien, so you should definitely consider sending this notice.
Required information for a Notice of Right to Lien in Alaska
Alaska lien laws § 34-35-064(a) lists the following mandatory details that must be included in your Alaska preliminary notice form:
- a legal description sufficient for identification of the real property;
- the name of the owner;
- the name and address of the claimant;
- the name and address of the person with whom the claimant contracted;
- a general description of the labor, materials, services, or equipment provided or to be provided;
- a statement that the claimant may be entitled to record a claim of lien; and
- the following statement in type no smaller than the font size used to write the previous information:
WARNING: Unless provision is made for payment of sums that may be due to the undersigned, your above property may be subject to foreclosure to satisfy those sums even though you may pay a prime contractor or other person for the labor, material, service, or equipment furnished by the undersigned.
When to serve an Alaska preliminary notice
The Notice of Right to Lien must be given before you start working on a project. One of the benefits of serving this notice is letting the property owner carry the burden of proving that you are not a qualified lien claimant, so if you want to keep this perk, you must serve your Notice of Lien Rights in Alaska before your first day of work.
If you fail to serve the preliminary notice before you furnish labor or materials to a project, you may still send it within 15 days of the filing of the Notice of Completion. Doing so will extend your mechanics lien recording deadline to 120 days instead of the usual 15 days.
Note, however, that property owners are not obligated to notify you if they have filed a Notice of Completion unless you handed them the Notice of Right to Lien before you started working. It is, therefore, worth taking the time to prepare and serve the preliminary notice before your first day of work to avoid missing the 15-day window altogether.
How to serve the Notice of Right to Lien in Alaska
You must serve your Alaska Notice of Right to Lien via certified mail with return receipt requested, or via personal delivery with a signed receipt acknowledgment from the recipient. It is best practice to keep copies of all receipts, signed acknowledgments, and other mailing documents related to serving this notice.
Note that once you serve this notice, a property owner may request the most recent accounting of the amount due and unpaid to you. You must send them this information within 5 days after receiving the request.
How to file an Alaska mechanics lien
1. Prepare your mechanics lien document
2. Record your mechanics lien
3. Enforce/release the mechanics lien
1. Prepare your mechanics lien document
What information should be in your Alaska mechanics lien form?
Your Alaska mechanics lien or Claim of Lien must contain the following pieces of information:
(1) a legal description of the property subject to lien
This legal description is the legal property description of your project location. Alaska statutes state that description must be “sufficient for identification,” so you must provide an accurate legal property description.
Requesting for a property’s legal description may be done by doing your own research or reaching out to the property owner(s) via a formal written request for information. In any case, you have to make sure that you have an accurate property description if you want your lien form to be considered valid.
(2) the name of the owner
This is the full name of the property owner(s). Keep an eye out for typographical errors and misspelling, as these small incorrect details could be fatal to your lien rights.
(3) the name and address of the claimant
This is your complete name and address.
(4) the name and address of the person with whom the claimant contracted
This is the name and the address of the person who directly hired you, who could be a property owner, general contractor, or another higher-tier party.
(5) a general description of the labor, materials, or services provided to the project
This is a quick overview of the type of work that you did on a project.
(6) the amount due to the claimant for the labor, materials, services, or equipment
This is the amount according to the terms of the contract and nothing more. Attorney fees and other lien-related expenses must not be included.
(7) the date the last labor, materials, services, or equipment was furnished
This is the date for when you last performed work on a project.
Alaska mechanics lien notarization
Your mechanics lien in Alaska must be notarized. Do not sign your mechanics lien form unless you are in the presence of an authorized notary officer.
2. Record your mechanics lien
Once your mechanics lien form is ready, you may record your lien in the recorder’s office in the county where the project is located. You do not have to notify the property owners that you have recorded a mechanics lien – there is no such requirement in Alaska.
When to record a mechanics lien in Alaska
There are two deadlines for recording an Alaska mechanics lien: within 120 days after you last performed work on a project, or within 15 days after a Notice of Completion has been filed by the owner.
If no Notice of Completion has been filed, all parties have 120 days following their last day of work to record a mechanics lien.
If a Notice of Completion has been filed, property owners are required to notify the parties who previously sent a valid Notice of Right to Lien about the filing of the Notice of Completion. These parties will still have 15 days to file a mechanics lien, but the key detail here is that if you have not submitted a Notice of Right to Lien, you might miss the 15-day deadline.
If you have served a valid Notice of Right to Lien but failed to receive a notification from the property owner that a Notice of Completion has been posted, your deadline remains at 120 days after your last day of work.
3. Enforce/release the mechanics lien
After recording your mechanics lien, you will either have to enforce or release the lien.
Enforcing the lien happens when you do not receive payment and your mechanics lien is about to expire. In Alaska, mechanics liens are only enforceable within 6 months of the date the lien was recorded. This means that after the 6th month, your lien is no longer valid and all records of unpaid debts are essentially cleared.
Note that you may extend this 6-month period if you file an Extension Notice within the original 6-month window. The Extension Notice must be recorded in the same office where you filed the original mechanics lien.
Regardless of when your lien expires, the important step is you must enforce your lien before it loses its effectiveness. Enforcing a mechanics lien means initiating a foreclosure lawsuit against the property owners. If you win the lawsuit, you will be able to recover your payment from the proceeds of the foreclosure auction.
If, on the other hand, you receive your full payment before your mechanics lien expires, you are expected to cancel or release the lien. This step is, however, not a strict requirement in Alaska. You may let your mechanics lien sit without getting it removed from the records, but it is considered best practice in the industry to have a mechanics lien released once it has been satisfied.
Important deadlines to remember when filing a mechanics lien in Alaska
Best practices when filing an Alaska mechanics lien
1. Serve the Notice of Right to Lien, even if not required.
The Notice of Right to Lien is a very important document in Alaska. Failing to serve it may not be fatal to your lien rights, but serving a valid preliminary notice has lots of benefits that may be worth your time.
If you serve a Notice of Right to Lien, you transfer the burden of proof to the property owners if they want to question your participation in their project. You also get “notification perks,” such as being able to receive a notice from the property owner informing you that a Notice of Completion has been filed.
A Notice of Completion dictates the deadline for recording a mechanics lien, so it is in your best interest to be aware that this document has been recorded if you want to keep on top of your deadlines.
2. Prepare your lien-related forms ahead of time.
The deadline for recording a mechanics lien in Alaska can go from 120 days to 15 days, depending on whether a Notice of Completion has been filed. Some parties may find 15 days to be such short notice for preparing a mechanics lien document, so you must try your best to prepare your lien forms ahead of time.
By preparing your mechanics liens ahead of time, you will not be rushing through the research and data-gathering process, and you will have ample time to check and review the correctness of your information. This is a very important practice because small errors in a mechanics lien can cause the revocation of your entire mechanics lien claim.
3. Release a mechanics lien once it has been satisfied, even if not required.
Releasing or canceling a lien is not required in Alaska, but it is considered a good business practice to release a mechanics lien as soon as payment is cleared in the bank.
A mechanics lien can be found by any person doing research on a property, and if your lien has been satisfied, it is only right that you let all potential buyers know that your claim has been settled.