HB1271

House Bill 1271 amends Arkansas law regarding mechanics' and materialmen's liens, specifically addressing lien priority in the context of construction mortgage loans. The bill establishes that construction mortgages have priority over mechanics' liens if the mortgage is for the purpose of funding the construction or repair. To verify the absence of prior construction activity, the bill allows lenders to rely on an affidavit from a licensed professional (such as an appraiser, architect, surveyor, or engineer) or, in certain residential cases, a designee of the lender or title agent. Once filed, these affidavits are considered conclusive evidence of the property's status at the time of inspection, protecting the lender's lien priority unless actual fraud is proven. Furthermore, the bill clarifies that if construction begins before a mortgage is recorded, only the liens for labor or materials provided prior to that recordation retain priority over the mortgage. Any individual providing a false affidavit is held liable for resulting damages or losses.