Recording of lien by commissioner.

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(1) The commissioner shall record with the county clerk and recorder of any county a notice of lien on behalf of all residents who enter into life care contracts with a provider to secure performance of the provider's obligations to residents pursuant to life care contracts. All reasonable costs of recording the lien shall be paid by the provider.

  1. From the time of the recording, there exists a lien for an amount equal to the reasonable value of services to be performed under a life care contract in favor of each resident on the land and improvements owned by the provider, not exempt from execution, that are listed in the notice of lien filed pursuant to subsection (3) of this section and that are located in the county in which the notice of lien is recorded.

  2. The lien shall be perfected by the commissioner by executing by affidavit the noticeand claim of lien, which shall contain:

  1. The legal description of the lands and improvements to be charged with a lien;

  2. The name of the owner of the property affected;

  3. A statement providing that the lien has been filed by the commissioner pursuant tothis section.

  1. The lien may be foreclosed by civil action.

  2. Any number of persons claiming liens against the same property pursuant to thissection may join in the same action. If separate actions are commenced, the court may consolidate the actions. The court shall, as part of the costs, allow reasonable attorney fees for each claimant who is a party to the action.

  3. In a civil action filed pursuant to this section, the judgment shall be given in favor ofeach resident having a lien who has joined in the foreclosure action for the amount equal to the reasonable value of services to be performed under a life care contract in favor of each resident. The court shall order the sheriff to sell any property subject to the lien at the time judgment is given, in the same manner as real and personal property is sold on execution. The lien for the reasonable value of services to be performed under a life care contract shall be on equal footing with claims of other residents. If a sale is ordered and the property sold and the proceeds of the sale are not sufficient to discharge all liens of residents against the property, the proceeds shall be prorated among the respective residents.

  4. The liens provided for in this section are preferred to all liens, mortgages, or otherencumbrances upon the property attaching subsequently to the time the lien is recorded and are preferred to all unrecorded liens, mortgages, and other encumbrances. The amount secured by any lien having priority to the lien filed pursuant to this section may not be increased without prior approval of the commissioner.

  5. The commissioner shall file a release of the lien upon proof of complete performanceof all obligations to residents pursuant to life care contracts.

  6. The commissioner may subordinate any lien filed pursuant to this section to the lienof a first mortgage or other long-term financing obtained by the provider, regardless of the time at which the subsequent lien attaches.

Source: L. 2017: Entire article added with relocations, (SB 17-226), ch. 159, p. 570, § 1, effective August 9.

Editor's note: This section is similar to former § 12-13-106 as it existed prior to 2017.


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