2010 CUMULATIVE SUPPLEMENT Chapter 4: Arkansas Construction and Design Law

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1 2010 CUMULATIVE SUPPLEMENT Chapter 4: Arkansas Construction and Design Law II(A) Design and Construction Professionals Liability of Design and Construction Professionals Generally In the text, add the following sentence to the end of the first paragraph: The statute of limitations for professional malpractice begins on the date of the occurrence, rather than the date the negligence was discovered. Bryan v. City of Cotter, 2009 Ark. 457, S.W.3d (Ark. 2009). II(C)(1)(a) Design and Construction Professionals Licensing and Regulation Design Professionals Architects In the text, the first sentence of the third paragraph should read: The Arkansas Architectural Act is administered by the Arkansas State Board of Architects, Landscape Architects, and Interior Designers which consists of nine (9) members appointed by the Governor and confirmed by the Senate for terms of five (5) years. In the text, the last sentence of the fourth paragraph should read: A person or entity that qualifies for an exemption may obtain a certificate of registration by exemption from the Arkansas State Board of Architects, Landscape Architects, and Interior Designers by paying the prescribed fee, which is not to exceed $350. A.C.A In the text, the last sentence of the fifth paragraph should read: An applicant for examination and registration must pay a fee not to exceed $350. A.C.A In the text, the seventh paragraph should be deleted.

2 II(C)(1)(b) Design and Construction Professionals Licensing and Regulation Design Professionals Engineers In the text, the first sentence of the third paragraph should read: The Arkansas Engineering Act is administered by the State Board of Licensure for Professional Engineers and Professional Surveyors which consists of nine (9) members appointed by the Governor for terms of four (4) years. II(C)(1)(c) Design and Construction Professionals Licensing and Regulation Design Professionals Interior Designers In the text, the first sentence of the fourth paragraph should read: The Arkansas Interior Designers Title Registration Act is administered by the Arkansas State Board of Architects, Landscape Architects, and Interior Designers, while the Arkansas Residential Interior Designers Act is administered by the State Board of Residential Interior Designers. II(C)(1)(d) Design and Construction Professionals Licensing and Regulation Design Professionals Landscape Architects In the text, the fifth paragraph should read: Each applicant for registration must take an examination, hold a degree in landscape architecture or a field related to landscape architecture, and have at least two years experience in landscape architecture. A.C.A II(C)(1)(e) Design and Construction Professionals Licensing and Regulation Design Professionals Surveyors In the text, the first sentence of the third paragraph should read: The Arkansas Land Surveyors Act is administered by the State board of Licensure for Professional Engineers and Professional Surveyors which consists of nine members appointed by the Governor for terms of four years. 2

3 In the text, add the following sentence to the end of the sixth paragraph: Additionally, any firm practicing surveying is required to obtain a certificate of authorization from the State Board of Licensure for Professional Engineers and Professional Surveyors. A.C.A (a). III(B) Considerations Applicable to Payments to Contractors and to Subcontractors Public Construction Projects In the text, the second and third sentence of the first paragraph should read: A.C.A (a)(1) permits a public agency to retain five percent of any earned progress payments from a contractor who is required to furnish a performance bond to assure performance of the contract. If the construction contract allows for phased work in which completion may occur on a partial occupancy, any retention proceeds withheld and retained shall be partially released within thirty (30) days in direct proportion to the value of the part of the capital improvement completed. A.C.A (a)(2). IX(D) Construction Liens Assignment of Lien Rights In the text, the first sentence should read: Pursuant to A.C.A , the lien shall be transferable and assignable, but it is not enforceable against the owner or proprietor until the owner or proprietor has actual notice of the assignment or notice pursuant to A.C.A (b). In the text, the following sentence should be added after the first sentence: The statute states that the owner of the ground or building is considered to have actual notice if, within thirty days of the assignment, a copy of the assignment is hand delivered to the owner, mailed to the owner s last known address or delivered to the owner s office, residence, or place of business by any means that provides written, third party certification of delivery. A.C.A (b). 3

4 IX(E) Construction Liens Notices In the text, the first sentence of the first paragraph should read: No lien upon residential real estate containing four (4) or fewer units may be acquired unless the owner of the residential real estate, the owner's authorized agent, or the owner's registered agent has received, by personal delivery or by certified mail, a copy of the notice set out in A.C.A (a)(7). A.C.A (a)(1). In the text, the notice language after the first paragraph should read: IMPORTANT NOTICE TO OWNER I UNDERSTAND THAT EACH CONTRACTOR, SUBCONTRACTOR, LABORER, SUPPLIER, ARCHITECT, ENGINEER, SURVEYOR, APPRAISER, LANDSCAPER, ABSTRACTOR, OR TITLE INSURANCE AGENT SUPPLYING LABOR, SERVICES, MATERIAL, OR FIXTURES IS ENTITLED TO A LIEN AGAINST THE PROPERTY IF NOT PAID IN FULL FOR THE LABOR, SERVICES, MATERIALS, OR FIXTURES USED TO IMPROVE, CONSTRUCT, OR INSURE OR EXAMINE TITLE TO THE PROPERTY EVEN THOUGH THE FULL CONTRACT PRICE MAY HAVE BEEN PAID TO THE CONTRACTOR. I REALIZE THAT THIS LIEN CAN BE ENFORCED BY THE SALE OF THE PROPERTY IF NECESSARY. I AM ALSO AWARE THAT PAYMENT MAY BE WITHHELD TO THE CONTRACTOR IN THE AMOUNT OF THE COST OF ANY SERVICES, FIXTURES, MATERIALS, OR LABOR NOT PAID FOR. I KNOW THAT IT IS ADVISABLE TO, AND I MAY, REQUIRE THE CONTRACTOR TO FURNISH TO ME A TRUE AND CORRECT FULL LIST OF ALL SUPPLIERS AND SERVICE PROVIDERS UNDER THE CONTRACT, AND I MAY CHECK WITH THEM TO DETERMINE IF ALL MATERIALS, LABOR, FIXTURES, AND SERVICES FURNISHED FOR THE PROPERTY HAVE BEEN PAID FOR. I MAY ALSO REQUIRE THE CONTRACTOR TO PRESENT LIEN WAIVERS BY ALL SUPPLIERS AND SERVICE PROVIDERS, STATING THAT THEY HAVE BEEN PAID IN FULL FOR SUPPLIES AND SERVICES PROVIDED UNDER THE CONTRACT, BEFORE I PAY THE CONTRACTOR IN FULL. IF A SUPPLIER OR OTHER SERVICE PROVIDER HAS 4

5 NOT BEEN PAID, I MAY PAY THE SUPPLIER OR OTHER SERVICE PROVIDER AND CONTRACTOR WITH A CHECK MADE PAYABLE TO THEM JOINTLY. SIGNED: ADDRESS OF PROPERTY DATE: I HEREBY CERTIFY THAT THE SIGNATURE ABOVE IS THAT OF THE OWNER, REGISTERED AGENT OF THE OWNER, OR AUTHORIZED AGENT OF THE OWNER OF THE PROPERTY AT THE ADDRESS SET OUT ABOVE. CONTRACTOR A.C.A (a)(7). In the text, the second sentence in the third paragraph should read: However, Section A.C.A (b)(3) states the notice requirement mandated under subsection (a) of this section as a condition precedent to the imposition of a lien by a laborer, subcontractor, service provider, or material supplier shall apply only to construction of or improvement to residential real estate containing four (4) or fewer units. A.C.A (b)(3). In the text, the third paragraph should read: No subcontractor, service provider, material supplier or laborer is entitled to a lien on commercial real estate unless that the subcontractor, service provider, material supplier or laborer notifies the owner of such real estate, the owner s authorized agent, or the owner s registered agent in writing, that such subcontractor, service provider, material supplier or laborer is currently entitled to payment, but has not been paid. This notice shall be sent to the owner, the owner s authorized agent, or the owner s registered agent 5

6 and to the contractor by registered mail, return receipt requested, before seventy-five days have elapsed from the time that the labor was supplied or the materials furnished. The notice must contain the following information: 1. A general description of the labor, service, or material furnished, and the amount due and unpaid; 2. The name and address of the person furnishing the labor, service or material; 3. The name of the person who contracted for purchase of the labor, service, or material; 4. A description of the job site sufficient for identification; and 5. The following statement set out in bold face type and all capital letters: NOTICE TO PROPERTY OWNER IF BILLS FOR LABOR, SERVICES, OR MATERIALS USED TO CONSTRUCT OR PROVIDE SERVICES FOR AN IMPROVEMENT TO REAL ESTATE ARE NOT PAID IN FULL, A CONSTRUCTION LIEN MAY BE PLACED AGAINST THE PROPERTY. THIS COULD RESULT IN THE LOSS, THROUGH FORECLOSURE PROCEEDINGS, OF ALL OR PART OF YOUR REAL ESTATE BEING IMPROVED. THIS MAY OCCUR EVEN THOUGH YOU HAVE PAID YOUR CONTRACTOR IN FULL. YOU MAY WISH TO PROTECT YOURSELF AGAINST THIS CONSEQUENCE BY PAYING THE ABOVE NAMED PROVIDER OF LABOR, SERVICES, OR MATERIALS DIRECTLY, OR MAKING YOUR CHECK PAYABLE TO THE ABOVE NAMED PROVIDER AND CONTRACTOR JOINTLY. A.C.A (b)(6)(E). In the text, the fifth paragraph should read: Every person who wishes to avail himself or herself of the provisions of the abovereferenced lien provisions must file a lien account with the clerk of the circuit court of the county in which the real property is situated, within one hundred twenty days after the last materials were furnished or the last work or labor was performed, but such a lien 6

7 claimant must first give ten days notice to the property owner before the filing of the lien with the clerk. This notice must be given to the owner of a building or improvement, and must state (i) the claimant holds a claim against the building or improvement, and (ii) the amount of the claim and from whom the amount is due. A.C.A and The lien notice may be served by an officer authorized by law to serve process in a civil action, by a person who would be a competent witness, or by mail with return receipt requested and delivery restricted to the addressee or the addressee's agent. Id. A lien account filed with the clerk of the circuit court must be verified, and must contain a just and true account of the demand due and owing, after allowing all credits, and must contain a correct description of the property to be charged with the lien. A.C.A In the text, the sixth paragraph should be deleted. In the text, the seventh paragraph should read: A.C.A provides that the owner of the property, any mortgagee or other person having an interest in the property, or any contractor, subcontractor, or other person liable for the payment of such a lien shall desire to contest the lien, then the person so desiring to contest the lien may file: (A) With the circuit clerk or other officer with whom the lien is filed as required by law a bond with surety, to be approved by the officer in the amount of the lien claimed; or (B) An action under subsection (f) of this section to protest the filing of the lien. (2) The bond shall be conditioned for the payment of the amount of the lien, or so much of the lien as may be established by suit, together with interest and the costs of the action, if upon trial it shall be found that the property was subject to the lien. 7