Is the lien waiver our Iowa subcontract makes us sign enforceable?
Nothing read in Iowa's mechanics' lien chapter voids or prescribes a lien waiver, and this rule records that rather than treating the silence as permission. Chapter 572 creates the lien: every person who furnishes material or labour for, or performs labour upon, a building or land for improvement, alteration or repair, by virtue of a contract with the owner, owner-builder, general contractor or subcontractor, has a lien upon the building or improvement and the owner's land, to secure payment for the material or labour (Iowa Code § 572.2(1)). The only waiver the chapter's read sections describe is one the owner may insist on before paying: on commercial construction, the owner is not required to pay the general contractor for work done or material furnished until ninety days after completion unless the general contractor furnishes the owner either receipts and waivers of claims for mechanics' liens signed by all persons who furnished material or performed labour, or a bond holding the owner harmless from loss by reason of subcontractors' liens (§ 572.33A(1)). The lien is not for everyone who builds: "An owner-builder is not entitled to a lien under this chapter as to work the owner-builder performs, or is contractually obligated to perform, prior to transferring title to the buyer" (§ 572.2(3)), and § 572.1(9) defines an owner-builder as the titleholder of record who furnishes material or performs labour, or contracts with a subcontractor to do so, "and who offers or intends to offer to sell the owner-builder’s property without occupying or using the structures, properties, developments, or improvements for a period of more than one year from the date the structure, property, development, or improvement is substantially completed or abandoned."
The trap
Iowa, unlike several states, has no section in the mechanics' lien chapter declaring an advance lien waiver void or unenforceable, so for a mechanics' lien the waiver's own words govern and the fight is one of general contract law rather than one protected by statute. Iowa does know how to void a lien waiver when it means to, which is why the absence here is worth noticing rather than assuming: for the commodity production contract lien of chapter 579B, § 579B.6 provides that "A waiver of a right created by this chapter, including but not limited to a waiver of the right to file a lien pursuant to this chapter, is void and unenforceable", severable from the rest of the contract. That section protects a contract producer of livestock, raw milk or a crop, not a construction subcontractor. Two limits that do come from the text: § 572.33A applies only to commercial construction properties, and the waiver it contemplates is a document the general contractor gives the OWNER so that payment can be released: it is not authority for what a subcontract may demand of a subcontractor. Whether an Iowa court will enforce a waiver signed before payment is received, and how a conditional waiver differs from an unconditional one, is not established by anything in this rule.
6 authorities
- statuteIowa Code § 572.2enactment date not established
The words that state the rule
Every person who furnishes any material or labor for, or performs any labor upon, any building or land for improvement, alteration, or repair thereof, including those engaged in the construction or repair of any work of internal or external improvement, and those engaged in grading, sodding, installing nursery stock, landscaping, sidewalk building, fencing on any land or lot, by virtue of any contract with the owner, owner-builder, general contractor, or subcontractor shall have a lien upon such building or improvement, and land belonging to the owner on which the same is situated or upon the land or lot so graded, landscaped, fenced, or otherwise improved, altered, or repaired, to secure payment for the material or labor furnished or labor performed.
- statuteIowa Code § 572.33Aenactment date not established
The words that state the rule
An owner of a building, land, or improvement upon which a mechanic’s lien of a subcontractor may be posted is not required to pay the general contractor compensation for work done or material furnished for the building, land, or improvement until the expiration of ninety days after the completion of the building or improvement unless the general contractor furnishes to the owner one of the following: a. Receipts and waivers of claims for mechanics’ liens, signed by all persons who furnished material or performed labor for the building, land, or improvement.
- statuteIowa Code § 572.33Aenactment date not established
The words that state the rule
b. A good and sufficient bond to be approved by the owner, conditioned that the owner shall be held harmless from any loss which the owner may sustain by reason of the posting of mechanics’ liens by subcontractors. 2. This section applies only to commercial construction properties.
- statuteIowa Code § 579B.6enactment date not established
The words that state the rule
A waiver of a right created by this chapter, including but not limited to a waiver of the right to file a lien pursuant to this chapter, is void and unenforceable. This section does not affect other provisions of a contract, including a production contract or a related document, policy, or agreement which can be given effect without the voided provision.
- statuteIowa Code § 572.2enactment date not established
The words that state the rule
An owner-builder is not entitled to a lien under this chapter as to work the owner-builder performs, or is contractually obligated to perform, prior to transferring title to the buyer.
- statuteIowa Code § 572.1enactment date not established
The words that state the rule
“Owner-builder” means the legal or equitable titleholder of record who furnishes material for or performs labor upon a building, erection, or other improvement, or who contracts with a subcontractor to furnish material for or perform labor upon a building, erection, or other improvement and who offers or intends to offer to sell the owner-builder’s property without occupying or using the structures, properties, developments, or improvements for a period of more than one year from the date the structure, property, development, or improvement is substantially completed or abandoned.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.