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What Is a Mechanic’s Lien?

Posted on October 28, 2023

If you are a real estate owner or investor, you may find yourself receiving notice of a mechanic’s lien, which can interfere with your ownership interests and right to sell the property. However, Missouri has specific laws that contractors must follow to make the lien enforceable, and many of them may miss an important step. An experienced real estate attorney from TdD Attorneys at Law can review your situation and challenge the enforceability of any liens placed on your property. Contact us today for a free case review.

Purpose of Mechanics’ Liens

Mechanics’ liens allow contractors and those who provide materials for construction projects to place a lien against real property to ensure they get paid for their work and supplies. A lien prevents a person from selling the property until the lien is resolved. It can also allow the lienholder to start a foreclosure action, sue the surety on a bond, or sue for collection of monies owed.

Who Can File a Mechanic’s Lien in Missouri?

Missouri law provides specific details about who can file a mechanic’s lien in the state. The law states that any of the following persons or entities can file a mechanic’s or materialman’s lien when they had an agreement for such services or supplies with the property owner or their agent (or the government in some circumstances):

  • Anyone who shall or who performed any work or labor on land
  • Anyone who rented machinery or equipment for commercial property for claims over $5,000
  • Anyone who used any rental machinery or equipment
  • Anyone who furnished any material, fixtures, engine, boiler, or machinery for any building, erection, or improvements on land or for repairing, grading, excavating, or filling the land
  • Anyone who landscaped or supplied or planted trees, plants, bushes or shrubs
  • Anyone who installed any outdoor irrigation system

Amount of Lien

The amount of the lien is tied to the value of goods and services provided for the construction project. This is usually based on the reasonable value of services or goods, rather than the amount that is contracted for. For example, for claims involving the rental of machinery or equipment, the lien is based on the reasonable value of the machinery or equipment at the time it was used, as well as for periods of nonuse when the equipment or machinery was on the construction site.

Notice of Right to Lien

One of the most important aspects of mechanics’ liens is providing proper notice of the right to file a mechanic’s lien. If this step is not taken, any subsequent lien can be challenged. This requires the party wanting the lien to do all of the following:

  • Properly serving the preliminary notice on all appropriate parties personally or by certified mail, return receipt requested
  • Serving the notice when they begin supplying materials or services for the project within the statutory date

There are several possible mistakes that can be made during this process that can jeopardize the enforceability of any future filed lien. For example, the contractor or material supplier may not provide service on all required parties. The preliminary notice must be served on the property owner. However, it must also be served on the general contractor unless the lienholder is working directly for them. Additionally, if the owner obtained a loan to fund the construction, the contractor or material supplier must serve the preliminary notice on the construction lender.

Types of Lien Notices

There is not a specific preliminary notice that prospective lienholders file. Instead, there are a number of notices that may be required for contractors and material suppliers to preserve their lien rights. If they fail to provide the right type of notice, challenges can be raised to any subsequently filed mechanics’ liens.

Notice to Owner

The notice of owner must be filed by the original contractor who has a construction contract with the property owner. This can be completed during the execution of this contract, when the first materials are delivered, when the work is completed, or with the first invoice. It must be served before the contractor receives any payments. The notice must include specific language required by Missouri law.

Consent of Owner

Any contractor or material supplier that did not directly contract with the owner on an owner-occupied residential project is required to obtain consent from the owner to have mechanics’ lien rights. As such, they will need to obtain a document the owner signs that includes statutory language that states the owner has consented to allowing them to file a mechanic’s lien for supplying materials or services to the project.

Notice of Use of Equipment

Equipment lessors on commercial projects must provide this type of notice for any contracts over $5,000 within 15 days of when the equipment or machinery is supposed to be used.

Notice of Intent to Lien

Anyone who wants to potentially file a lien must serve the property owner (and other required parties) with a notice of intent to lien. This notice must include specific information, including:

  • The property owner’s name
  • The legal description of the property
  • The contractor or material supplier’s name
  • The hiring party’s name and information
  • A description of the work completed or materials provided
  • The amount of the claim

This notice must be served at least ten days before filing a mechanic’s lien.

Notice of Rights

A notice of rights is required when the property owner plans to sell the property during a construction project. The owner must post a notice of intended sale with a closing date. Those on the project must file a notice of rights at least five days before the stated closing date to preserve their lien rights.

Legal Requirements for Missouri Mechanics’ Liens

Certain information must be included in the mechanic’s lien, including:

  • The property owner’s name
  • A general description of the property and location
  • The contractor or material supplier’s name
  • The date work began and ended
  • A description of the work completed
  • The amount of money owed
  • Statutorily required statements

Mechanics’ liens are recorded in the county recorder’s office in the county where the property is located. The lien must be served personally or by certified mail, return receipt requested on all of the parties. They must also provide proof of service.

Contact an Experienced Real Estate Attorney for Assistance

The legal team at TdD Attorneys at Law knows the ins and outs of Missouri mechanics’ liens. We can analyze your situation, review whether the contractor took all of the necessary steps, raise any challenges to a lien, and work to resolve the matter in your favor.

Contact us today for your free consultation.