Missouri Real Estate Lawyer

Do you want to place a mechanics lien on real estate in Missouri? Do you own real estate in Missouri with a mechanics lien on it? If the answer to either question is yes, then you need to read this article about Missouri mechanics lien notices. Contractors, if you did not give the following notices, you might not have a right to a mechanics lien.  Real estate owners, you can beat a mechanic’s lien if the following Missouri mechanics lien notices were not given to you.

Missouri mechanics lien notices are very strict.  The right to assert a mechanic’s lien will be lost if the proper notices are not given. There are four types of Missouri mechanics lien notices.  (i) general contractor lien waiver notice, (ii) notice of intended sale, (iii) notice of rights, and (iv) a “10-day notice”.

General Contractor Notice to Property Owner

Let’s say Oscar owns a house, and he hires Connie to make some repairs to the house. Connie is a general contractor, because her work contract is with Oscar, the property owner.  Connie does the work required of her by the contract.  She sends her final invoice to Oscar, who refuses to pay. Connie then files a mechanics lien, only to later learn it’s no good, because she failed to give Oscar a lien waiver notice 429.012 RSMo. requires a general contractor to give to the property owner the notice provided in section of 1 of that statute. The notice generally tells the owner to get lien waivers before paying the general contractor.

This notice may be given under four circumstances. First, when the owner signs the work contract. Second, when the materials are delivered. Third, when the work starts. And fourth, it may be delivered with the first invoice. A general contractor has no right to assert a mechanic’s lien if fails to deliver the lien waiver notice at one of these four times. Also, the statute is very particular about what the notice says and how it is formatted. So make sure you carefully follow these requirements provided in the statute.

The surest way to give the notice is to print it on the face of the contract. Most professional general contractors do this.  A general contractor may face a lawsuit for slander of title if it files a mechanics lien without giving this notice. Slander of title entitles the property owner to recover its attorney’s fees in a lawsuit, along with any other damages. You can avoid this complication by properly providing this notice. Getting the advice of an attorney to set this up correctly is money well spent.

Notice of Rights

420.016 RSMo. says that anyone who performs work on residential real estate “waives and forfeits” his right to assert a mechanic’s lien if he did not first record a “notice of rights”. (See the statute for what the notice must say.) This statute is complex and covered here only generally. You should consult an attorney experienced in this area of law about how this statute might apply to you.

This statute is relatively new, and no case law exists to better define the scope of the statute.  The statute applies to the construction of residential structures and to “improvements” made to such structures. The property owner will argue that the statute is broad in scope. Therefore, anyone performing work on what appears to be residential property should record the notice, just to be safe.

Notice of Intended Sale

A notice of rights must be recorded with the recorder of deeds in the county where the property is located “not less than five calendar days prior to the intended date of closing stated in a notice of intended sale”.  The property owner records the notice of intended sale. (See the above statute for what this notice must state.) This notice is required if the work is intended to “facilitate” a sale of the property to a “bona fide purchaser”. This notice must be recorded at least forty-five days prior to the earliest date on which the owner intends to close on the sale of the property, and it must provide the closing date. The notice of rights must be recorded not less than five calendar days prior to this closing date.  However, no notice of rights must be recorded if no notice of intended sale is recorded.

The timing of the recording of the owner’s notice can cause some problems if the lien claimant does not know that it’s been recorded.  For example, the owner might not record the notice until after the owner hires a contractor. Short of periodically checking with the recorder of deeds, how is a contractor, subcontractor or material man supposed to know whether the owner recorded the notice? The statute requires the owner to post the notice on the property and to mail a copy to the person hired by the owner. However, the person hired is not relieved of his duty to record his notice of rights if the owner fails to post and mail the notice.

Sale of the Property

Also, a lien claimant loses his right to a mechanic’s lien if the notice of rights is recorded after the owner sells the property. The statute does not say that this would occur only if a notice of intended sale was recorded before the sale, although such might be implied from other parts of the statute.

These unfair situations can be overcome only by recording the notice of rights when the work contract is signed. All persons providing labor, material, services or other improvements to the property should check with the recorder before signing the contract to see if a closing date of less than five days has been recorded.  If it has been, then the person hired will likely be barred from asserting a mechanic’s lien.  The contractor might then want to get paid upfront or try to arrange some other security interest.

Subcontractor 10-Day Notice

This last notice is easier. §429.100 RSMo. requires all persons, except a general contractor, to serve upon the property owner a notice ten days prior to filing a mechanics lien.  The notice must state that the person has a claim on the improvements to the property, the amount of the claim, and who owes that amount. This notice must be personally served on the owner or the owner’s agent. The statute does not state whether the ten days are calendar days or business days, so assume it’s business days. A person who properly provides a notice of rights under §429.016 is not required to provide this ten-day notice.

Take-Away on Missouri Mechanics Lien Notices

A properly asserted mechanics lien provides tremendous leverage.  However, Missouri mechanics lien notices are complex. Every person who provides labor, material, equipment and other improvements to real estate can benefit from better understanding how Missouri mechanics lien notices work.  I have filed many mechanics liens, and I have litigated many mechanics lien lawsuits since 2005. Feel free to contact me for a free consultation about Missouri mechanics lien notices.

The information provided in this article is for educational and informational purposes only, and it t is not intended as legal advice.  You should consult an attorney experienced in Missouri’s mechanics lien laws about how the information in this article might apply to your own specific circumstances.

The choice of a lawyer is an important decision and should not be based solely upon advertisements.

© 2016 Michael Sewell

Contact: Michael Sewell, JD (314) 942-3232 | michael@SewellLaw.net.