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Alaska Statutes.

Title 34. Property

Chapter 35. Liens

Section 62. Construction Financing.

AS 34.35.062. Construction Financing.

(a) A claimant to whom payment for the labor, material, service, or equipment furnished for a project is past due may give the lender a stop-lending notice. The claimant shall at the same time give a copy of the notice to the owner and to each prime contractor with whom or through whom the claimant or the claimant's debtor has contracted. A stop-lending notice must

(1) instruct the lender to stop disbursing, advancing, or otherwise providing construction financing for the project;

(2) be verified by the claimant;

(3) state the claimant's name, address, and telephone number;

(4) describe the labor, material, service, or equipment furnished by the claimant and state the name of the person to whom furnished;

(5) describe the real property improved by the labor, material, service, or equipment and state the name of the person the claimant believes to be the owner of the real property;

(6) state the amount due and unpaid to the claimant for the labor, material, service, or equipment.

(b) A stop-lending notice is binding upon a lender from the time the lender has received it and had a reasonable opportunity to act upon it until it expires or is revoked. A notice expires on the 91st day after it is received by the lender unless the claimant has commenced an action on the claim that is the subject of the notice before that day and the lender has received written notification of the action. A stop-lending notice may be revoked at any time in writing signed by the claimant. Expiration or revocation of a notice extinguishes the liability of the lender to the claimant under (c) of this section.

(c) A lender who disburses, advances, or otherwise provides construction financing for a project after it is the subject of a stop-lending notice is liable to the claimant in an amount equal to the lowest of the following amounts:

(1) the amount of construction financing disbursed, advanced, or otherwise provided by the lender after receipt of the claimant's stop-lending notice; if there are two or more stop-lending notices when the disbursement occurs, the lender's liability to each claimant is based on the claimant's ranking under AS 34.35.112 ;

(2) the amount owed to the claimant, including interest, costs, and attorney's fees, for labor, material, service, or equipment furnished for the project by the claimant as established by a written agreement signed on or after the date of the stop-lending notice by the claimant, the owner and the prime contractor with whom or through whom the claimant or the claimant's debtor has contracted or by a final judgment in an action in which the owner, the claimant, and the claimant's debtor are named and, if necessary, served parties;

(3) 150 percent of the amount stated in the stop-lending notice.

(d) Within 10 days after receiving the written agreement or a certified copy of the judgment under (c)(2) of this section establishing the amount owed to a claimant from whom it has a binding stop-lending notice, a lender shall send to the claimant a verified statement showing, by date and amount, all construction financing provided by the lender for the project. Except as provided in (e) of this section, the lender shall include with the statement payment in the amount of the lender's liability to the claimant under (c) of this section.

(e) If there are two or more claimants to whom a lender is or may be liable under (c) of this section and the lender is uncertain as to the amount of its liability or possible liability to each, the lender may bring an action to require the claimants to interplead their claims.

(f) A draw against construction financing may be made only after certification of job progress is delivered to the lender by the owner. The form of the certification may be prescribed by the lender and must include

(1) a statement of the progress of the project, including the percentage of completion of the project;

(2) the name, address, and telephone number of each prime contractor who has furnished labor, material, service, or equipment for the project;

(3) the amount owed by the owner to each listed prime contractor; and

(4) the portion of the draw that the owner will pay to each listed prime contractor.

(g) The owner shall use each draw as indicated in the certificates given by the owner to the lender under (f) of this section. The lender may not be required to verify the information in a certificate and is not liable for an error in a certificate.

(h) An owner who intentionally fails to apply construction financing proceeds as indicated by the certificate required under (f) of this section is guilty of a class A misdemeanor. The penalty provided under this subsection does not replace any other penalty that may be provided for by law for the same conduct.

(i) Within 10 days after being requested, a lender shall provide a person who has given the lender a stop-lending notice with a copy of

(1) each certificate received by the lender under (f) of this section; and

(2) a verified certificate stating the amount of construction financing proceeds committed by the lender for the project that have not been disbursed by the lender.

(j) The lender may not provide construction financing proceeds for payment of indebtedness of the owner that is not incurred for the project.

Note to HTML Version:

This version of the Alaska Statutes is current through December, 2004. The Alaska Statutes were automatically converted to HTML from a plain text format. Every effort has been made to ensure their accuracy, but this can not be guaranteed. If it is critical that the precise terms of the Alaska Statutes be known, it is recommended that more formal sources be consulted. For statutes adopted after the effective date of these statutes, see, Alaska State Legislature If any errors are found, please e-mail Touch N' Go systems at E-mail. We hope you find this information useful.

Last modified 9/3/2005