Does Arkansas impose any transfer tax on conveyances of real property? post-judgment collection techniques are recognized in Arkansas?
Yes. Most deeds of real property in which the consideration paid exceeds $100.00 are subject to tax at the rate of $3.30 for each $1,000.00 (or fractional part thereof) of consideration. There are a number of transactions which are exempt from this transfer tax. The list of exempt transactions is found at Ark. Code Ann. § 26-60-102. The transfer tax is normally paid one-half by the Seller and one-half by the Purchaser, although the parties may agree otherwise. An affidavit of compliance with the transfer tax law is required for each deed filed in Arkansas.
Unlike some other states, mortgages and deeds of trust are not subject to any type of transfer tax in Arkansas.
Can the parties to a real estate transaction specify that the law of another state govern the transaction?
Yes, this is frequently done due to Arkansas’ usury restrictions (See Usury in the Creditor’s Rights FAQ’s). However, the other state’s law must bear a "reasonable relationship" to the transaction. The most common situation is an out-of-state lender which wishes to have the transaction governed by its home state laws although it intends to take a mortgage on real property located in Arkansas. As stated, an Arkansas court will uphold the choice of the other state’s law if the law of that state bears a "reasonable relation" to Arkansas. For example, the loan documents should specifically state that they are governed by the law of the other state. Additionally they should have been negotiated and executed in the other state, and provide that they are not effective until accepted in the other state. Payment should be made to the lender in that other state, and funding of the transaction should originate in the lender’s home state. This is not a procedure which should be undertaken without a competent Arkansas attorney. Use of form documents which contain boilerplate language that does not recite the true facts behind the transaction is an invitation to disaster.
Does Arkansas allow mechanics/materialman’s liens for improvements to real estate?
Yes, although the procedure is somewhat cumbersome and must be followed to the letter. Arkansas treats different types of real estate upon which a mechanics/materialman’s lien is sought to be imposed differently. If the project is either commercial or residential with over 4 units, the materials supplier or laborer must send to the property owner and general contractor a registered notice (in precise, statutory form) before 75 days have elapsed from the last time the laborer or materials were furnished.
If the project is one containing 4 or fewer residential units, the owner must first receive a different statutorily required notice which should be incorporated into the contract between the owner and general contractor. The actual lien affidavit must be filed within 120 days after the last materials or labor are supplied.
Regardless of what type of project, the lien claimant must also give 10 days notice prior to filing the lien of his intention to do so. Mechanics/materialman’s liens are the subject of frequent litigation and are hyper technical. A potential lien claimant should familiarize himself with the rules governing mechanics/materialman’s liens before supplying materials or labor.
Can a construction lender insure that its mortgage takes priority over mechanics/materialman’s liens?
Yes. If the mortgage was recorded first, and recites that it was for the purpose of funding construction or repair, it shall have priority over other liens. However, it must also have been recorded prior to any visible manifestation or activity on real estate that would lead a reasonable person to believe that construction or repair of an improvement to the real estate has begun or will soon begin.
Does Arkansas recognize dower and curtesy rights?
Yes, if a person dies leaving a surviving spouse and a child or children, the surviving spouse shall have dower rights for his or her life in one-third of all lands owned during the marriage, unless such dower rights have been relinquished. To be valid, the relinquishment must be by deed or a separate instrument, acknowledged as a deed would be.
Does Arkansas landlord/tenant law allow for self-help evictions?
Although Arkansas landlord/tenant law is sketchy, case law makes it clear that self-help evictions are not permitted, and can result in liability for the landlord.
Does Arkansas recognize a landlord’s lien?
For many years, the only statutory landlord’s lien in Arkansas had to do with agricultural land and provided for a lien granted to the landlord on crops. Presently the law also provides that any personal property in the leased premises is subject to a lien in favor of the landlord for monies owed by the tenant. This landlord’s lien does not take priority over other liens covering such personal property.
The reader should be aware that Arkansas law also provides that upon the voluntary or involuntary termination of any tenancy, all property left on the premises shall be deemed abandoned and may be disposed of by the landlord as it sees fit without recourse.
Does Arkansas recognize or allow non-judicial foreclosures?
Yes, non-judicial foreclosures (a/k/a statutory foreclosures) are available in Arkansas. However, in order to obtain a deficiency judgment, suit must be filed within 12 months after the foreclosure sale.
What is required to establish adverse possession of real property in Arkansas?
To establish adverse possession, the person claiming it must have held color of title for at least 7 years and have paid the advalorem taxes on the property. Alternatively, the person claiming may have held color of title to real property contiguous to the property being claimed by adverse possession for 7 years and have paid advalorem taxes on the contiguous property. The common law requirements of exclusive, open, notorious, and hostile possession apply in either instance.
