Missouri Liens Services, LLC was launched to help Missouri business protect their mechanic's lien rights. In August of 2009 Missouri enacted new mechanic’s lien legislation which make asserting a mechanic’s lien much more difficult for subcontractors and material suppliers. The law was promoted by general contractors and title companies, all of whom gain at the expense of subcontractors and material suppliers. The new law adds additional hurdles for lien claimants who do work on residential property. Under this new law, a lien claimant could lose their lien rights even while they are still working on the job. The attorneys at Missouri Lien Services, LLC are experienced litigators in this field and can help protect your rights and get you paid.
Filing a “Notice of Sale” Means Mechanic’s Lien Rights May Be Lost
The new lien law introduces two new concepts:
- a “Notice of Sale,” filed by a property owner
- a “Notice of Rights,” filed by a subcontractor or material supplier.
The new law provides that if the property owner intends to sell the real estate, even while construction is ongoing, then the property owner must give a minimum of 45 day’s “Notice of Sale.” The lien claimant must then file its own “Notice of Rights” at least five days before the intended sale. If the lien claimant fails to file a “Notice of Rights” within the required time, then the lien claimant’s mechanic’s lien rights are lost forever – even if the job is ongoing – even if the six month time to file a lien has not expired. How does a subcontractor or supplier learn of the property owner’s “Notice of Sale”? There are three notification methods contemplated in the statute, each of which has its own problems.
Before the law changed, suppliers and subcontractors had an objective standard about when to file a lien claim. Everyone knew a lien claimant had six months from furnishing the last labor or material to file a lien claim. But now if a property owner records a “Notice of Sale” that means that the existing six month time to file a lien claim is no longer operative. Failure of the subcontractor or supplier to record its “Notice of Rights” is an absolute waiver of lien rights forever, notwithstanding that under the former law there still may be time to file a lien.
These new provisions apply only to “residential property.” But “residential property” is now broadly defined in the new law to include apartments, condominiums, streets, sidewalks “and other facilities within the defined residential use structure or located on or within the separate and identifiable parcels identified as and for residential use.”
At The Beginning of Every “Residential” Job.
Because an owner may post a “Notice of Sale” at any time, we are urging our clients not to wait for the property owner to do so, but instead to record their own “Notice of Rights” at the earliest opportunity. The best way to protect lien rights is for all subcontractors and material suppliers to file their “Notice of Rights” at the very beginning of every job which is arguably residential in nature under the new expanded definition of “residential property.” A sample intake form which you may use to transmit the information necessary to generate a “Notice of Rights” can be found here.
Even if the supplier or subcontractor files a “Notice of Rights” at the beginning of a job, the unpaid subcontractor or supplier must still file a lien claim within six months of finishing the job.
