GETTING PAID FOR PARTS AND SERVICE


. To be enforceable, an artisan’s lien must be “perfected.”


In Iowa, an artisan’s lien is perfected by and during the possession of the equipment by the dealer. Stat- ed alternately, in Iowa, if the dealer gives up the equipment before they are fully paid, they give up their artisan’s lien on the equipment2


. Nebraska has a similar provision regarding the necessity of possession of the equipment3 after payment is past due.


A perfected artisan’s lien gives the lienholder the right to sell the equipment. This is called “foreclosure” of the lien.


HOWEVER, before the lien can be foreclosed (and the property sold), a “notice” of the potential sale must be sent to ALL parties who hold an interest in the equipment5


. This would include the “owner” of the


equipment and anyone who holds a PRIOR lien on the equipment. Accordingly, it is necessary to do a lien search PRIOR to issuance of the notice.


The notice of sale must6 :


• Identify the customer, and the dealer who holds the lien • Describe in reasonable detail the equipment which will be the subject of the sale • Describe the method the dealer intends to use to sell the property • Provide a listing of charges by the dealer • State the date of the intended sale.


1 2 3 4


5 6


Iowa Code §577.1(1) and Nebraska Revised Statute 52-201(1). Iowa Code §577.1(1)


Nebraska Revised Statute 52-201(1)


Nebraska Revised Statute 52-201(1) and Nebraska Uniform Commercial Code 9-310 (a). An action to foreclose a Nebraska artisan’s lien must be commenced within one year of filing of the lien per Nebraska Revised Statute 52-203. Tere is no similar statutory restriction in Iowa.


Nebraska Uniform Commercial Code 9-611(c) and Iowa Code §554.7308(1)


Nebraska Uniform Commercial Code 9-613(1) and Iowa Code §554.7308(1). At Nebraska Uniform Commercial Code 9-613(6) there is a recommended form for the notice of sale. Iowa law does not provide a similar form.


22 | The Retailer Magazine | Nov/Dec . However, Ne-


braska law imposes an additional requirement that a UCC financing statement be filed for the artisan’s lien to be perfected4


. A recommended practice would be to file the Nebraska UCC financing statement shortly


By SAMUEL I. KREAMER, J.D., C.P.A., Kreamer Law Firm, P.C.


Sometimes it is necessary to exercise your legal rights when a customer fails to pay for parts and service. This article will help you understand those rights under Iowa and Nebraska law, and how those rights are exercised.


While the employee who actually provides the services and/or installs parts may be a “mechanic,” when the customer does not pay his/her bill the dealership acquires an “artisan’s lien” (NOT a “mechanic’s lien”) on the subject equipment1


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