A mechanic’s lien is an incredible collection tool.
It gives subcontractors the ability to collect even if there was no direct contract with the owner (note: the subcontractor’s lien rights are more limited in Missouri when dealing with residential property, as discussed below).
Once a lien attaches, it is incredibly difficult to remove from the property, absent payment to the claimant.
However, it is not impossible to do so. There are several defenses that can help an owner clear the lien off his/her/its property in the event that one is filed.
This article will specifically discuss 5 defenses an attorney can assert on an owner’s behalf to defend against mechanic’s liens.
Although the purpose of the mechanic’s lien act is a remedial one, mechanic’s liens are creatures of statute and therefore require strict compliance with the statutory prerequisites in order to be effective. As such, the statutory elements that make up a lien are the most logical area to attack first.
If any of these elements are lacking, the lien can be attacked on grounds of inadequacy. It should be noted that Missouri courts usually impose the standard of “reasonable and substantial compliance” with the mechanic’s lien statutes. Lake Ozark Const. Indus., Inc. v. Osage Land Co., 168 S.W.3d 471, 472 (Mo. Ct. App. 2005), as modified (May 31, 2005).
One of the first elements deals with legally describing the property in the lien.
Table of Contents
1. The Mechanic’s Lien Must Contain the Proper Legal Description
The statute requires the mechanic’s lien to provide “a true description of the property, or so near as to identify the same, upon which the lien is intended to apply” R.S.Mo. § 429.080; see also Breckenridge Material Co. v. Byrnesville Const. Co., 842 S.W.2d 551, 552 (Mo. Ct. App. 1992).
In the Breckenridge Material case, the lien claimant included a property description that failed to enclose the tract of land.
The Court of Appeals stated the following with respect to construing the legal description:
Although a claimant must substantially comply with the statute in order to secure its benefits the description of the property need not be letter perfect. Rather, when the rights of third parties are not involved, the description need only be sufficient to enable one familiar with the locality to identify the premises intended to be covered by the lien.” Breckenridge Material Co. v. Byrnesville Const. Co., 842 S.W.2d 551, 552 (Mo. Ct. App. 1992)(internal citations omitted).
The court held that the failure to enclose the tract of land was merely a typographical error that was in substantial compliance with the lien statutes. Id. Given the remedial purpose of the mechanic’s lien statute, the Court held that it was an enforceable lien. Id.
However, in the event that the description of the property upon which the lien is to be filed does not provide a description sufficient for someone familiar with the locality to ascertain the same, then it probably is subject to attack for failure to include an essential element.
2. Failure to File or Foreclose on the Lien within the Applicable Statute of Limitations Period
Nearly every cause of action has a statute of limitations. When dealing with a mechanic’s lien, the statute of limitations is critically important because the authority for the liens is statutory. Many Missouri courts refer to liens as “creatures of statute” and therefore the lien claimant must closely comply with the statute, especially the permissible filing period, or his/her/it’s lien rights do not technically exist under the law.
The lien filing time may not be extended by agreement between the parties either. The Missouri Court of Appeals ruled on a case dealing with two parties, who purported to extend the lien filing time by contract. The Court held the following:
The effect of [§§ 429.010, 429.080, and 429.180] is to limit the duration of the opportunity to secure the lien. If the plaintiff does not comply with the time requirements of filing the lien, the lien is lost. The requirement of filing the lien on time is not something which defendant can enlarge…A mechanic’s lien is a creature of statute, and not of contract.
Manning Const. Co. v. MCI Partners, LLC, 419 S.W.3d 134, 138 (Mo. Ct. App. 2013).
“Under chapter 429, there are two statutes of limitation that a claimant must comply with in order to perfect its mechanic’s lien, section 429.080 and section 429.170. Section 429.080 states that a lien must be filed within six months after the debt has accrued (i.e. within six months of completion of the work).” J.H. Berra Paving Co. v. City of Eureka, 50 S.W.3d 358, 361 (Mo. Ct. App. 2001).
“Section 429.170 states that an action to enforce the mechanic’s lien must commence within six months after filing the lien. An action to enforce is “‘commenced within the statute by the filing of a petition and the issuance of the summons.’” J.H. Berra Paving Co. v. City of Eureka, 50 S.W.3d 358, 361 (Mo. Ct. App. 2001)(citing City–Wide Asphalt Co., Inc. v. Industrial Paving, Inc., 838 S.W.2d 480, 482 (Mo.App.1992) (citing Continental Electric Co. v. Ebco, Inc., 375 S.W.2d 134, 137 (Mo.1964))).
“It is therefore well settled under the mechanic’s lien law that a plaintiff must bring suit within six months after filing the lien and if no suit is brought during this time, the lien is lost.” J.H. Berra Paving Co. v. City of Eureka, 50 S.W.3d 358, 361 (Mo. Ct. App. 2001)(citing Badger Lumber Co. v. Staley, 141 Mo.App. 295, 125 S.W. 779, 780 (1910)).
3. The Mechanic’s Lien Statement must be Notarized
Pursuant to R.S.Mo. § 429.080, the mechanic’s lien must have “verification by the oath of [the lien claimant] or some credible person for him.”
Verification is just a legal name meaning that the document needs to be notarized.
While this seems like a simple element, many unsophisticated contractors quickly browse through the mechanic’s lien statutes and forget to cross their T’s and dot their I’s. While notarizing a lien is simple, it is incredibly important.
This element is critical as it lends to the credibility of the document. Also, the statute requires it, so the contractor must satisfy this element to have a valid lien.
Getting a document notarized is simple and can usually be done at the bank. Make sure that you do not sign the document, however, until you are in the presence of the notary. This is important because the notary cannot verify that the signature is yours unless s/he watches you sign the same. The representative/notary assisting you will also require (or should require) that you present some form of valid identification.
Other places that might have notaries available for use include credit unions, real estate brokerage firms, and sometimes the courthouse, and occasionally local libraries, depending on the county and municipalities.
Regardless of where you decide to get your mechanic’s lien notarized, just make sure you get it done before filing it.
To avoid the hassle of searching for a notary and filing the lien, you can hire a lawyer, who usually has a notary on staff to facilitate the process.
4. A Subcontractor’s Mechanic’s Lien must include an Itemized Statement of the Account
A “just and true account” forms the basis of the right to maintain a suit to enforce a mechanics’ lien. R.S.Mo. § 429.080; See Glenstone Block Co. v. Pebworth, 264 S.W.3d 703 (Mo. App., 2008).
“To facilitate fulfillment of the statutory requirement to file a just and true account, Missouri courts have developed distinct requirements for general contractors and subcontractors. ‘An ‘original’ [general] contractor may make a ‘just and true account’ if his lien statement simply states his account in a lump sum, without itemization.’ A subcontractor, on the other hand, must ‘include in his lien account an itemized statement of the labor and materials furnished.’” Commercial Openings, Inc. v. Mathews, 819 S.W.2d 347, 349–50 (Mo. 1991)(internal citations omitted).
For subcontractors, the itemized statement subjects their lien statement to much scrutiny. In order for the subcontractor’s lien to be valid, it must include items that Missouri courts deem lienable.
What items are lienable?
Generally labor and materials that are incorporated into the project qualify as “lienable items.”
Below are some examples of items that courts have deemed as lienable items.
“[M]aterials such as lumber, paneling, and sheet rock, used in the construction of a residence are lienable.” Missouri Land Dev. Specialties, LLC v. Concord Excavating Co., 269 S.W.3d 489, 505 (Mo. Ct. App. 2008)(citing Boyer Lumber, Inc. v. Blair, 510 S.W.2d 738, 747 (Mo.App.1974).
“Items such as tape, paint and paint brushes, sandpaper, and saw blades may be included in a mechanic’s lien if they are used up or consumed in improving the property.” Id.
There is a slew of items that may fall under the “lienable” category, but the lien claimant needs to ensure that these items were incorporated into the improvements on the property or that these items were directly used in making the improvements on the property.
In any case, subcontractors need to substantiate their lien claims and attach supporting documentation.
5. A subcontractor does not typically have lien rights on owner-occupied residential property.
Only under very rare circumstances does a subcontractor have lien rights on residential property in Missouri.
There are a few exceptions when a subcontractor can file a mechanic’s lien on residential property, but typically, when the work is performed on an owner occupied property of 4 units or less, the subcontractor will not have valid lien rights. R.S.Mo. § 429.013.
Instead, the applicable statute requires that the subcontractor have a consent from the owner to lien the property. A subcontractor rarely ever has this consent because general contractors are reluctant to ask a homeowner for a consent to lien their property at any point in the project, and the subcontractor often does not have a direct relationship with the homeowner. Therefore, subcontractors do not have lien rights on an owner-occupied residential property with any significant frequency.
In conclusion there are a number of different defenses that can be asserted when property is under a threat of a mechanic’s lien filing. This article has discussed a number of the defenses and intricacies relating thereto.
The following are some of the defenses that an owner can assert when facing the threat of a lien filing:
- The mechanic’s lien must contain a proper legal description;
- The lien must be filed and foreclosed on within the applicable statute of limitations periods;
- The mechanic’s lien statement must be notarized;
- Any subcontractor’s lien must contain an itemized list of the expenses;
- Subcontractors usually will not have lien rights on owner-occupied residential property.
As an owner of real property that could be under fire, it is important to know the rights that can be asserted to protect your investment (or one of your most prized possessions). If you find yourself in this type of situation, please contact one of our construction lawyers, so we can advise you as to your rights.
If you know any additional defenses to mechanic’s liens, we would like to hear your comments and feedback.