By: Joseph M. Leone
Apparently, there is some confusion over whether recent changes to statutory recording requirements apply to the recordation of mechanic’s lien notices. On July 1, 2020, a new version of Indiana Code 32-21-2-3, which governs recording requirements for conveyances of property, went into effect. In previous versions, I.C. 32-21-2-3 (including in its pre-recodification form as I.C. 32-1-2-18) required a conveyance, mortgage, or instrument of writing to be either acknowledged by the grantor or proved before certain qualified individuals (e.g. a notary public). I.C. 32-21-2-3(a).
In the last legislative session P.L 80-2020, Sec. 1 changed the “or” to an “and,” with the result that a conveyance, mortgage, or instrument of writing must now be both acknowledged by the grantor and proved before one of the requisite individuals identified in the statute. I.C. 32-21-2-3(a). Therefore, one who grants an interest in property must acknowledge the writing and it must be signed by a witness both of which must be notarized.
The confusion which seems to have arisen is that some believe that the new recording requirements contained in I.C. 32-21-2-3 apply to a notice of the intention to hold a mechanic’s lien (and to the release of the mechanic’s lien). However, such persons are mistaken; I.C. 32-21-2-3 does not apply to the recordation of mechanic’s lien notices.
This issue was confronted by the Court of Appeals of Indiana in Eyster v. S.A. Birnbaum Contracting, Inc., 662 N.E.2d 201 (Ind. Ct. App. 1996). In Eyster, the mechanic’s lien claimants filed sworn statements of notices of mechanic’s liens, however, the notices were not acknowledged as (at least according to the property owners) was required by I.C. 32-1-2-18 (the predecessor statute to I.C. 32-21-2-3). The lien claimants’ argued that they complied with the requirements of the mechanic’s lien statute (f/k/a I.C. 32-8-3-3) which only required that the lien notices be sworn statements. The trial court granted the property owner’s motion for summary judgment on the basis that the lien claimants had not complied with the acknowledgment or proof requirement in I.C. 32-1-2-18.
On appeal, the Court reversed the trial court’s order granting summary judgment and held that I.C. 32-1-2-18 did not apply to recordation of a mechanic’s lien. In other words, neither an acknowledgement nor a proof was required for a mechanic’s lien to be valid and enforceable (i.e. recordable) provided the lien claimant complied with the requirement of the mechanic’s lien statute that the lien notice be a sworn statement. The pertinent passage from the Eyster case is as follows:
Specifically, ALC argues that because the jurats lack acknowledgments, the statements are insufficient to create mechanic’s liens. In support of its argument, ALC directs us to Ind.Code 32–1–2–18 . . . .
First, I.C. 32–1–2–18 provides in pertinent part as follows:
To entitle any conveyance, mortgage or instrument of writing to be recorded, it shall be acknowledged by the grantor, or proved before any judge, or clerk of a court of record, justice of the peace, auditor, recorder, notary public, or mayor of a city in this or any other state, or before any minister, charge d’affaires, or consul of the United States in any foreign country.
I.C. 32–1–2–18 concerns the ‘alienation of property’ rather than mechanic’s liens. Further, there is one reference in I.C. 32–8–3 to the acknowledgment requirement. I.C. 32–8–3–1, which concerns no-lien agreements, provides in pertinent part as follows:
No provision … in the contract of the owner and principal contractor that no lien shall attach to the real estate … shall be valid … unless the contract containing such provision … shall be in writing, and shall contain specific reference, by legal description of the real estate to be improved and shall be acknowledged as provided in case of deeds and filed in the recorder’s office….
If the legislature had intended to create an acknowledgment requirement for mechanic’s liens, the legislature could have done so. The acknowledgment requirement found in I.C. 32–1–2–18 does not apply to mechanic’s liens.
Eyster v. S.A. Birnbaum Contracting, Inc., 662 N.E.2d 201, 203–04 (Ind. Ct. App. 1996).
As mentioned above, I.C. 32-1-2-18 is the predecessor statute to I.C. 32-21-2-3. The language is nearly identical. In addition, when the property statutes were re-codified in 2002 (P.L.2-2002), as is typical in recodifications, the new law contained a provision which stated that “the substantive operation and effect of the prior property law [shall] continue uninterrupted as if the recodification act of the 2002 regular session of the general assembly had not been enacted.” I.C. 32-16-1-2. This applies to both the mechanic’s lien notice statute (I.C. 32-28-3-3) and the conveyance recording statute (I.C. 32-16-1-2). Therefore, the law regarding applicability of the conveyance recording statute to mechanic’s liens which the Eyster court analyzed in 1996 is still valid today.
So, no, the law regarding recording of mechanic’s lien notices did not change. A sworn statement is all that is required for a mechanic’s lien to be valid and enforceable. However, as with all recordings, one’s ability to get a document recorded, in large part, rests with the Recorder. If the Recorder rejects the document then one’s life has just been made much more difficult. Therefore, prior to attempting to record anything, we suggest that a call be made to the Recorder’s office to discuss their recording requirements. If the Recorder requires an acknowledgement and a proof in order to record a mechanic’s lien or release of lien then, it would be in one’s best interest to follow that advice.
For questions regarding mechanic’s liens, please contact your DSV attorney or Joseph M. Leone at firstname.lastname@example.org.
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