- Alaska is a full price lien state.
- Special Treatment of Condominium Projects: Alaska provides a special procedure for releasing a lien in connection with closing out a condominium project. AS 34.35.119, in connection with AS 34.35.071(f), provides for a unit-by-unit close-out of a condominium project. The project must be registered under the Horizontal Property Regimes Act (AS 34.07). Once this is done, the owner of such a project may force a lien claimant to release its lien on a pro rata basis as each unit is closed out and sold. The ability to force the lien claimant to release a portion of his lien applies to only those lien claimants who claim a lien against the entire building.
The portion of the claim that must be released is computed as follows:
condo unit area + its pro rata
portion of common areas X total amount of claim
total area
* In order to force the lien claimant to release the above portion of his lien, the owner must pay 115% of the amount computed according to the above formula for each unit that is released until the full amount of the claim of lien is paid.- * As further protection, a lien claimant is only required to release a pro rata portion of his claim only if and to the extent that the construction lender also gives a partial release of its deed of trust according to the same formula.
- * Stop-Lending Notice - A claimant to whom payment is past due may give the construction lender a stop-lending notice. A copy must be given to the owner and to each prime contractor with or through whom the claimant or the claimant's debtor contracted.
- The notice must be verified by the claimant
- Instruct the lender to stop lending
- State the claimant's name, address and telephone number
- Describe the labor, material, services or equipment furnished, and the name of the person to whom furnished
- Describe the real property improved and the name of the person believed to be the owner and the amount due and unpaid to the claimant.
- A stop-lending notice expires on the 91st day after it is received by the lender unless the claimant has commenced an action on the claim before that day, and the lender has received written notice of the action. In addition, a stop-lending notice may be revoked at any time in writing with the signature of the claimant. If the stop-lending notice expires or is revoked, there is no bank liability. The lender may make further disbursements by determining its statutory liability and setting aside the funds to cover that liability. A lender receiving a stop-lending notice or notice of right to lien for which it is not the lender must give written notice to the claimant within 10 days that it is not the lender.
Notice Speed Bumps
- Notification is required when contracting directly with the owner on private projects.
- Alaska law does not require any notice or filing prior to the performance of work. Lien claimants that file a Notice of Right to Lien, receive several benefits; by giving a Notice of Right to Lien to the owner, the claimant shall receive advance notice of the owner’s Notice of Completion including shortening the time for recording claims of lien.
- By giving to the owner a Notice of Right to Lien, the owner is then required to give that claimant notice of at least five (5) days before he (the owner) records the Notice Of Completion
Mechanic’s Lien Speed Bumps
- An owner (and sometimes the general contractor) can reduce the time for recording Claims of Liens from 90 days to 15 days from the date a Notice of Completion is recorded.
- Mechanic’s Liens in Alaska are “inchoate”.
- Priority: As long as the construction lender’s deed of trust is properly recorded prior to any claims of lien or notices of right to lien being recorded, the construction lender’s lien will always be superior to all other mechanic’s liens for the ensuing construction.
- In the event that the foreclosure sale actually takes place and the sale proceeds are insufficient to cover all of the lien claims, priorities are as follows: First in order are those who perform labor other than contractors; then union benefit trusts; next materialmen and subcontractors; and last is the general contractor.
Foreclosure Speed Bumps
- A claimant has the option of recording an Extension Notice within the first 6 month period and, by doing so, can extend the lien period for up to another 6 months.
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