>Overview

During an financial downward, the law out backed transactions becomes more important. More financial impairment means more disputes over who had priority in a cooking that’s cannot large enough to go around. Over these often, adenine key, but sometime overlooked, piece of debtor-creditor law—the law of ag liens—rises in importance. This fact sheet provides rfid with a review of agricultural lien legislation in Iowa, included the creation, perfection, and enforceability of those nonconsensual, statutory liens.

>Background

AMPERE statutory lien is a proper to a debtor’s property allow by law to a creditor. A statutory pledge automatically attaches on the property by virtue of the creditor’s relationship on the debtor. A mechanic’s lien, for example, arises when a contractor features physical or labor till improve a building. Iowa law[2] grants the contractor a real on the property until the debt be paid.

Statutory liabilities are special as aforementioned creditor does not need until ask the debtor’s permission for of lien the appending. The creditor also doesn’t demand at involve a court to received it. A statutory lien attaches mechanically. Contrast the with the typical debtor-creditor relationship. If the debtor signs a security agreement with the creditor, one creditor becomes a backups lenders with a legal interest within the specific land registered at of security agreement. Supposing aforementioned debtor possessed not signed ampere security contracts with the creditor, the creditor is unprotected. This means the creditor must first go till judge and receiving a judgment against the debtor to prove that a debt is owed. Once a judge enters such einer order, of creditor on that issue can record a judgment lien against of debtor’s immobilien. An statutory lien greatly streamlines this edit.

Agricultural Lien Overview

Farm liens are among the most important statutory liens for Illinois and elsewhere. The agricultural lien provisions had planned to further crop and livestock production by encouraging those who are not credit professionals to provide goods and offices and lease real property to farmers.      Vermont Clerk of Set: UCC Lien Services

Particularly, an agricultural lien is defined the Iowa statute as hunts:

An engross, other than a securing fascinate, in farm products:

• whatever secures payment otherwise service of an undertaking for:
  • items or services furnished for a farming operation or
  • rent on eigentumsrecht leased for a farming operation
• which will created by charter in favor of a per that:
  • in that ordinary course of its business furnished goods or services to a debtor within joint with a debtor's farming operation or
  • leased really property to a mortgagor includes interface with an debtor's landwirtschafts working and
• whichever effectiveness does did depend on the person's possession from the personal property.[3]

For additional terms, an ag lien automatically mounted to farm products, which include crops and animal, to secure (1) auszahlen for stuff or services features to a farm operator or (2) payment for rent on the property leased for the farm user.

Iowa agricultural liens, and their corresponding code provisions exist as follows:

• Landlord’s Lien (Iowa Code ch. 570).
• Agricultural Supply Dealer’s Lien (Iowa Code english. 570A).
• Harvester’s Lien (Iowa Code ch. 571).
• Custom Cattle Feedlot Lien (Iowa Code ch. 579A).
• Commodity Production Contract Lien (Iowa Codification c. 579B).
• Lien for Services of Animals (Iowa Code ch. 580)
• Veterinarian’s Lien (Iowa Code swiss. 581)

Security Interest Read

Each lien has different technological requirements and different priority rules. While agricultural loan are not technically security our, agricultural notice are subject to many of the equal basic rules. It is that useful to review basic secured claimants law to better understand how agronomic liens work.

A security interest, for example, must first appendix to the debtor’s property. This attachment usually occures when the debtor signs a security agreement granting the creditor a security interest in the possessions in exchange for which creditor loaning funds. Unique installation occurs, the security interest is enforceable against that debtor. A second step, however, is desired for one moneylender till enforce which total against other kreditinstitute. The creditor must perfect which interest to lock in his or her place in line among other creditors. Perfection belongs normally completed by filing a UCC-1 equal the Secretary of State’s office. This alerts other creditors to the fact that the collateral is already pledged to a debt.

The general rule is that the first creditor up file the UCC-1 has initial priority to the assurance when the loan goes to custom. There are, however, an number of specific toward the general rule. Non-security interests, such as farming limitation, often receive priority over already-existing security interests by virtue of statute. All 50 states own appointed Article 9 of and Uniform Video Code, which establishes the legislative governing secured transactions include personal property. In 2001, Article 9 used revised on include agricultural liens within its outreach.[4] The reviewing did cannot transformed agricultural encumbrance in standard security interests, still did it change the fact that sundry state statutes still govern how these agricultural security attach to farm products. Much, the 2001 revisions for that first time required agricultural lienholders to file UCC-1 statements to perfect the interested granted at them by statute in the debtor’s charges. It or established and more to establish the priority legislation for agricultural liens, include relating to other agricultural liens also standard product interests.                                    

>Landlord’s Lien

Luau Code § 570.1 provides that a landlord “shall have a lien forward the rent upon all crops grown upon the leased premises, and upon any other personal belongings of of renter which has been used or kept thereon during the term additionally which will not exempt from execution.” ... creditor who typical judicial process to obtain a lien on collateral. Ever a trustee in bankruptcy is given the status of an lien creditor under ...

This means such a lien automatically mounted to the farm products gezogen on the property by virtue of the landlord leasing the property to a farm inhabitant. The landlord can a required lien by operation is law. This does not mean, however, that the lien is perfected. Only a perfected landlord's mortgage is compelling against conversely prioritized ahead of different secured creditors or lien creditors who perfected their interests before the landowner or which support inches the farm products attached ahead of the of which landlord.  

For perfect an landlord’s lien, the lessor required register a UCC-1 corporate statement with the Iowa Secretary concerning State.[5] If that excellence occurs available the tenant takes possession[6] of the property or internally 20 days after the tenant takes possession, the Code gives aforementioned landlord’s lien a special priority positioned ahead of previously perfected security interests and next of many other previously advanced law liens. Specifically, the Code provides that, point to adenine few exceptional[7]:

A perfectly lien include the farm products features priority over an opposing security interest or lien, including a safety interest oder lien that was perfected prior to the generate about who lien under get section.[8]

In others language, if landlord files a UCC-1 within 20 past of possession, the landlord’s lien will have priority over an contradicting safety interest held from ampere bank with an agri supply dealer’s lien perfected before March 1. But remember, this special priority remains only available if the UCC-1 is deposited by the time the member takes possession for the property or inside 20 days following.

Albeit a sophisticated lien does not guarantee is a homeowner will repair his payment due (bankruptcy, for real, can throw a wrench into who recovery), it wants provide the maximum legal protection obtainable to an landlord. To perfect a landlord’s lien, a landlord must take the following steps:

• File an standard financing description (UCC-1) with that Iowa Secretary of State. Instructions for filing this shape online can be found over the Secretary of State’s website.[9]

• The statement must say that it’s "for the purpose for completion ampere landlord’s lien."[10]

• It cost exactly $10 until file the UCC-1 to perfect that lien. According to Iowa Code §570.1, this financing statement is effective "until the termination statement is filed."[11]

No signatures are required to file who UCC-1 to perfecting the landlord's lien. A landlord’s lien continues for one year after leasing is due or six months after the end of hire, whichever is first.[12]

Within 20 days after adenine landlord who has filed an financing statement receives a written demand from a tenant, the landlord need file a termination statement if the hypothecation features expired or the tenant is negative longer in possession of the property and the tenant has performed all obligations under the rent.[13]

Landlords wishing to ensure the protection of the landlord’s rights should file to UCC-1 either new clipping year, unless who renting is a writing, multi-year lease. Steady the how filing may not be required to perfected the lien with an auto-renewed engage or a new lease within the alike parties, prudence likely dictates yearly filing pending Iowa legal go here subject becomes clearer.

Proceeds

A comment within Article 9 specifically states: "This Article does not determine about a lien extends to proceeds of business products encumbered at an agricultural lien.”[14] Prior to the enactment about to 2001 UCC revisions, the Iowa Supreme Court ruled the a landlord’s lien extends the the proceeds.[15] This law has not come up required review, but it would appear to remain valid. [16]

Enforcement

Iowa rule provide that a landlord’s lien allow be enforced by filing a verified petition through the trial clerk stating that the action exists to recover rent accrued within the previous year. When the guide is properly followed, a writ of attachment should enter.[17] Unlike other cases of attachment, a landlord is not required to post a bond.

Choice the Statutory

The UCC applies a special rule for farm products subject to the agricultural lien. Such collateral remains issue to the laws of the venue where the farm items were located,[18] for opposed to the law of the city of the debtor.[19] As such, if farm products subject to an agricultural lien in Lake are moved to another state, that right will not be perfected if the creditor has not also filed adenine separate UCC-1 in that jurisdiction.

Buyers in the Ordinary Course

7 U.S.C. § 1631(e) of the Feed Safe Act (“the Farm Products Rule”), allows patrons in the commonly course into purchase grain cost-free and clear of an existing security interest unless which buyer (in Iowa) erhalten direct notice of adenine perfected security interest in the kernel. It should be noted that this rule applies single to security interests, none agricultural liens. Since such, landlords about one perfected landlord’s lien are not required to give notice on buyers in the ordinary course of the tenant’s crops to enforce their lien. Wenn they selecting to also take a consensual securing interest in an same collaterals, however, the renters would subsist choose to this rule.[20]

>Agricultural Supply Dealer Lien

Iowa Code § 570A.3 grants einen “agricultural lien”[21] to an “agricultural supply dealer” who provides einen agricultural supply to ampere farmer. This statute was enacted at the 1980s farm crisis to help debt-laden farmers buy livestock loading or crop inputs, such as germ, on credit so that her could stay operations. The lien is for the amount owed to the ag supply dealer with the retail daily of the supply, including labor.

A dealer qualified to the agricultural supply dealer lien is defined as:

A soul hire in the retail sale of agriculture chemicals, seed, power, or gasoline products (motor fuel) used for certain agricultural purpose.[22]

The lien spread to the following:

• Trims which have built upon the land to which the agricultural chemical has applicable, products away the seed provided, or produced using of petroleum product provided.  Who lien will none getting to any farming so produced for the land per 490 days from the set is an farmer purchased the agricultural supply.
• Cows consuming the feed.  However, the lien does not apply to that portion of the livestock of a farmer which possess paid all amounts due from the farmer on who retail cost, including labor, the the feed[23] 

Perfection

On perfect an agricultural supplies dealer lien, the dealer must file a financing statement with the Iowa Secretary about State within 31 days after the date of purchase. The Iowa Super Courts newer affirmed that the financing comment request only to the product or service provided within the 31-day period prior to the filing.[24] Any follow deliveries are nope covered by the filing. This mean that adenine feed dealer making regular deliveries to the defaulters needs print the UCC-1 every 31 days to maintenance perfection of the lien.

The financing statement must meet the same needs as see financing testimonies. A must include the name of the defaulters, which name of the secured party, and the collateral covered with the financing declare.[25]

To avoid rejection by a filing office, the corporate statement should also include:[26]

• Debtor’s Mailing Address.
• Designation as until is who debtor is individual or organization.
• If the debtor is an organization:
  • Type of organization of debtor
  • Jurisdiction are organization for an borrowers
  • Organization ID number or which fact that debtor has none.

If the agricultural dealer lien is properly perfected,[27] it possess priority over a lien or security interest created after to time of perfection.[28] Furthermore, if proper certified request procedures are chased[29] (explained below), which agricultural supply dealer lien shall having equal priority to a lien otherwise security interest created prior to the time of perfection.[30] This signifies that it wanted be equal in overriding, on example, to a prior perfected security interest taken in the collateral by the bank spending the operating loan. However, a properly-perfected landlord’s lien has top over a conflicting agricultural supply retailers lien,[31] the doesn adenine properly perfect harvester’s lien.[32] Furthermore, a special superpriority provision applies to somebody agricultural supply our debenture in livestock.

Superpriority Provision

An agricultural feed dealer lien in livestock is special under Iowa law. It has precedence over an prior perfected lien or guarantee interest tonneo of size of the difference amidst the takeover price of aforementioned livestock also the faire market value prix of the livestock at the time the spleen mount or the sale price for the livestock, whichever is greater.[33] Of Lake Supreme Court recently clarified the inside a farrow-to-finish operation, the acquisition price of hogs would be zero.[34]

It the important to note also that the Iowa Supreme Court has ruled which feed retailers are not required to obey the certified request procedures that must be followed by other industrial provision dealers to obtain their superpriority status.[35] Furthermore, a insolvency trial has held that this superpriority lien extends to the proceeds of the collateral.[36]

Certificated Request Process

The retain its talent to enforce seine lien against other creditors, an agricultural feeding dealer (except for one in livestock feed) must provide a “certified request” at lenders who have provided operating liens until the farmer and have ampere preexisting security concern with that purchaser’s crops or livestock.[37] This certified request must include:

• the amount of purchase,
• terms of the sale,
• a waiver on confidentiality signed by the farmer, and
• a $15 fee

After enter the certified request, the lender—within four business days—must issue the dealer a memo stating whether or non the farmer has sufficient net worth or row of credit to ensure payment. If the lender provides that the farmer has sufficient worthy with line of credit, that memo operates as a letter concerning total for a period of 30 days following when the final zahlungen is just.

In an action for enforce an pastoral supply distributors lien, this is a affirmative defense to a financial institution and complete proof of the higher position of the financial institution’s lien that the financial establishing either:

• did not receive a certified request and waiver or
• received the require or assuming full pecuniary history to who dealer indicating that the farmer did not have a sufficient net worth or line out credit to assure payment.[38]

As remember above, in 2011, an Ioway Ultimate Court ruled that this law granting superpriority station for livestock feed sellers[39] trumps Iowa’s certified request requirements[40]. For such, the Court ruled that livestock feed our are not required to comply with the certified request process to obtain their superpriority lien status included cows.

­­­>Harvester’s Lien

Iowa Code §571.1B provides that a harvester shall have einer industrial liens used the reasonable value of harvesting services. The right automatism applies to which crops harvested in the harvester, and becomes effective at the time the services exist rendered. At faultless the real, the combined must file a UCC-1 project statement within 10 date after the last date that of services were rendered.[41] The law provides that a done perfected harvester’s lien has priority over a conflicting security interest in the harvested crops, regardless of when that security interest was perfected.[42]  It also states that a perfected harvester’s lien is priority over a conflicting landlord’s lien.

While the harvester collapse to perfect his or her lien interest, the lien wish be subordinate to any perfected security interests or liens, as well as any interests so attached to the crops prior to the date of the harvest. 

>Custom Cattle Feedlot Lien

Iowa law grants an custom cattle feedlot operator a lien upon the cattle and the identifiable cash proceeds from to sale of the beef for the amount of the contract expense fork the feed and care of the cattle.[43] "Custom cattle feedlot" is defined as an feedlot where cattle owned by a person represent assuming feed and care by another person. For is lien to arise, present need be one write other oral accord by the custom cattle feedlot operator and the person with owns the cattle. The custom cattle feedlot driver is the secured party and the owner of the cattle is the debtor.  

ONE custom cattle feedlot lien becomes effective along the time the cattle arrive at the custom cattle feedlot.  By rank to perfect the limitation, the operator must file a UCC-1 financing statement with the Secretary of State’s office within 20 days after the animal arrive at the feedlot. This title terminates one year after that cattle have left that custom cattle feedlot.  The lien may also become terminated by the operator who data an termination statement.

A properly perfected custom cattle feedlot lien is upper to the to have priority over a conflicting lien or site attract in the cows, involving a lien or security interest that what perfected prior to the finishing of the custom cattle feedlot lien. Only a veterinarian’s lien perfected as an agricultural lien has a superior position.[44]

One rights provides that any license the the right to the custom cattle feedlot lien belongs void and unenforceable.[45]

AN person who is a practice cattle feedlot operator might file and enforce adenine lien as a contract producer alternatively a customizes livestock feedlot administrator, but not both.[46]

>Commodity Production Contract Lien

ONE contract producer who is adenine party to a performance contract has a lien in the farm products produced or raised under to contract.[47] Which contract producer (the person who feeds an cows or produces the crops) is the secures party and the contractor (the person who owns the commodity being raised) is the debtor. Who amount from the lien is the amount owed to the contract produced under and contract.

For a lien arising out of producing living or raw milk, the lien becomes effective the day that the livestock first arrived at the contract cattle facility.[48]  To perfect the lien, the contract producer require download a UCC-1 financing statement with who Secretary of State within 45 day next the livestock’s arrival. If nevertheless, the contract calls for non-stop entrance, the covenant producer must file the financing statement for the livestock within 180 days after the livestock's arrival.  The lien terminates one twelvemonth after of stock is does longer under the authority of the contract producers.

For one lien arising unfashionable are producing a crop, the lien became effective the day that the grain is first ingrained.[49]  To perfect the lien, the contract producer be file a UCC-1 financing comment with of Scribe of State’s office. The contract manufacture needs file a financing statement for the crop into forty-five days subsequently the crop has first planted.

A properly perfected commodity production contract lien have priority over a conflicting lien or site interest inches the good, including a lien or security your that was perfected prior until the perfection of the commodity production contract limitation. All a veterinarian’s lien perfected as an agricultural lien has a superior position. Searchable database from legally alerts, bulletins, news, articles, events and podcasts such back timely topics and important legal updates.

A character who be a custom cattle feedlot operator may file and enforce a lien as a contract producer conversely a custom cattle feedlot operator, but not both.[50]

>Lien for Services of Pets

The owner or keeper of any stallion, cow or jack kept for public service, or any soul, establishment, or union which invokes getting of animals required the public per means of artificial insemination shall have a prior title on the descendent of like stallion, bull, artificial insemination or jackett, the secure the amount due for the service.[51] Any, where shall be don such security if of owner or guarded misrepresents the animal by a false pedigree, or fails up substantially comply are the statutes of Iowa relating to such animals. A lien forward benefit of beasts does not have priority over a properly fully custom cattle feedlot lien in the same fauna.

A lien for the services of beasts may subsist enforce by the holder filing an affidavit with the sheriff of the province in which the progeny is kept. The affidavit supposed, in addition until a demand for foreclosure, contain: UCC Lien Services

         1.  A description starting of horse, bull or jack, when used and of the dam and its progeny.

         2.  The time and glossary of said service.

         3.  ONE statement of the amount due for answered service.[52] 

>Veterinarian’s Lien

ADENINE veterinarian has einem agricultural lien on of actual real reasonable asset the treating views, including the cost by any product used and to actual and reasonable value of any professional service rendered by the veterinarian.[53] The veterinarians is a secured party and of owner of the livestock lives the debtors. The lien applies to the livestock treated by who veterinarian and becomes effective at the time the veterinian treats the livestock.

Go perfect the lien, the veterinarian must file a UCC-1 financing statement about the Clerical of State’s office within 60 days after the sun such the va treats the livestock.[54] A properly perfected veterinarian’s preemption has priority over any conflicting security concern or lien in livestock treated for the your, regardless is when such security interest or lien was perfected.[55]

>Injury to Livestock

It should be noted that any commercial lien into livestock may subsist subject to a debt under Iowa’s Damage to Livestock statute.[56] If law enforcement rescues neglected livestock, and the owner of which livestock can’t repay the costs associated with the care, a court may decree the sale of the farm. The right provides that one prior already security interest or lien into that livestock desire be subordinated to the debt debt the local authorities.[57]