Difference between revisions of "Construction Liens in Missouri"
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The lien for the things aforesaid, or work, shall attach to the buildings, erections or improvements for which they were furnished or the work was done, in preference to any prior lien or encumbrance or mortgage upon the land upon which said buildings, erections, improvements or machinery have been erected or put… (RSMo 429.050) The lien for work and materials as aforesaid shall be preferred to all other encumbrances which may be attached to or upon such buildings, bridges or other improvements, or the ground, or either of them, subsequent to the commencement of such buildings or improvements. (RSMo 429.060) | The lien for the things aforesaid, or work, shall attach to the buildings, erections or improvements for which they were furnished or the work was done, in preference to any prior lien or encumbrance or mortgage upon the land upon which said buildings, erections, improvements or machinery have been erected or put… (RSMo 429.050) The lien for work and materials as aforesaid shall be preferred to all other encumbrances which may be attached to or upon such buildings, bridges or other improvements, or the ground, or either of them, subsequent to the commencement of such buildings or improvements. (RSMo 429.060) | ||
| − | A construction lender cannot achieve priority over a mechanic's lien. The lien dates from the visible commencement of work and has priority over any prior lien, which is recorded after the date of the visible commencement of work. Any pre-existing mortgage, which is recorded prior to the commencement of work, the proceeds of which are not to be used for construction, has priority over a subsequent mechanic's lien. | + | Any person enforcing such lien may have such building, erection or improvement sold under execution and the purchaser may remove the same within a reasonable time after such a sale.1 In other words, if the date of attachment of a mechanic's lien is subsequent to the effective date of another encumbrance, the mechanic's lien will be superior as to the building or improvements constructed, but inferior as to the land. Section 429.060 |
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| + | A construction lender cannot achieve priority over a mechanic's lien, applying the "doctrine of waiver” developed by the Missouri courts. The lien dates from the visible commencement of work and has priority over any prior lien, which is recorded after the date of the visible commencement of work. Any pre-existing mortgage, which is recorded prior to the commencement of work, the proceeds of which are not to be used for construction, has priority over a subsequent mechanic's lien. | ||
==Registries== | ==Registries== | ||
Revision as of 10:34, 2 April 2019
Contents
Overview
Construction Liens in Missouri are referred to as Mechanics' and Materialmen's Liens in the statutes authorizing them. They are considered Type I Liens, and so when a lien is filed, it has priority back to the commencement of construction and does not require any special notice or registration to have this priority.
Sources
Forms
- Notice of Commencement - N/A.
- Notice of Completion - N/A.
- Notice of Intended Sale
- Notice of Rights
- Lien Claim Form
- Just and True Account
- Lien Waiver
- Conditional
- Unconditional
Search
Examination
Underwriting
Ideally get an unconditional waiver from the general contractor before starting any new construction project.
Authorized Claimants
Any person who shall do or perform any work or labor upon land… or furnish any material… for any building, erection or improvements upon land, or for repairing, grading, excavating, or filling of the same… by virtue of any contract with the owner or proprietor thereof, or his or her agent… upon complying with the provisions of sections 429.010 to 429.340, shall have for his or her work or labor done… a lien upon such building, erection or improvements, and upon the land belonging to such owner or proprietor on which the same are situated. MO Rev Stat § 429.010.1.
Any person or entity who performs work or delivers materials for construction purposes has the statutory right to file a mechanic's lien. (Chapter 429 Missouri Revised Statutes) Architects and engineers are specifically protected under the statute. MO Rev Stat § 429.015. With respect to owner-occupied, residential property which is being repaired or remodeled, only the original contractor has lien rights unless the contractor obtains written consent from the owner that subcontractors can file liens if not paid.
Lien Priority
The lien for the things aforesaid, or work, shall attach to the buildings, erections or improvements for which they were furnished or the work was done, in preference to any prior lien or encumbrance or mortgage upon the land upon which said buildings, erections, improvements or machinery have been erected or put… (RSMo 429.050) The lien for work and materials as aforesaid shall be preferred to all other encumbrances which may be attached to or upon such buildings, bridges or other improvements, or the ground, or either of them, subsequent to the commencement of such buildings or improvements. (RSMo 429.060)
Any person enforcing such lien may have such building, erection or improvement sold under execution and the purchaser may remove the same within a reasonable time after such a sale.1 In other words, if the date of attachment of a mechanic's lien is subsequent to the effective date of another encumbrance, the mechanic's lien will be superior as to the building or improvements constructed, but inferior as to the land. Section 429.060
A construction lender cannot achieve priority over a mechanic's lien, applying the "doctrine of waiver” developed by the Missouri courts. The lien dates from the visible commencement of work and has priority over any prior lien, which is recorded after the date of the visible commencement of work. Any pre-existing mortgage, which is recorded prior to the commencement of work, the proceeds of which are not to be used for construction, has priority over a subsequent mechanic's lien.
Registries
There are no special registries with regard to Construction Liens in Missouri.
Filing Deadlines
In post construction/improvement sale transactions, a Notice of Rights must be recorded by the lien claimant in the office of the Recorder of Deeds, not less than five (5) days prior to the date of closing stated in the Notice of Intended Sale recorded by property owner. Subsequent to that filing, the lien claimant has six (6) months to file his claim with the clerk of the circuit court in the proper jurisdiction. (RSMo 429.080) NOTE: Filing requirements and lien periods are different for residential versus non-residential property and for improvements versus demolition or material supply - review the Revised Statutes of Missouri Section 429 closely.
The lien must be filed within six months from the date the person last performed work or delivered materials. An action to enforce a mechanic's lien must be brought within six months of the filing of the lien.
Notice of Rights
This process appears to have been developed in order to prevent new buyers from getting hit with mechanic’s liens. Basically the seller has to record the notice and also give separate notice to the contractor at least 45 days prior to closing. If any contractors do not record a Notice of Rights at least five days prior to the closing date, then they lose the ability to file a mechanic’s lien against the property. They still retain a regular contract remedy against the prior owner, however.
Because the notice must be filed at least 45 days prior to closing, a closing cannot be moved up if it would then fall within that 45 day period. A seller can close after the date in the notice without having to file a new notice, but they cannot move the date up, otherwise the protection against mechanic’s liens would be lost.
Enforcement Deadlines
All actions under sections 429.010 to 429.340 shall be commenced within six months after filing the lien, and prosecuted without unnecessary delay to final judgment; and no lien shall continue to exist by virtue of the provisions of said sections, for more than six months after the lien shall be filed, unless within that time an action shall be instituted thereon, as herein prescribed. MO Rev Stat § 429.170 (2016).
Other
Releases
Missouri has no statutory procedure for releasing a mechanic's lien in exchange for a surety bond. If a lien is settled before a suit is filed, a mechanic's lien release is recorded in the county recorder's office.
Tenant Improvements
On April 12, 2016, the Missouri Court of Appeals for the Eastern District handed down an opinion Crafton Contracting Company, et al. v. Swenson Construction, Inc.
Under this opinion, unpaid mechanics lien subcontractor claimants who performed tenant finish improvements in a shoe store in a regional shopping mall were able to establish and enforce mechanics liens against the entire mall property. The tenant is as an agent of the owner/landlord for purposes of the Mechanics Lien Statute, §429.010, R.S.Mo.
