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5 Rights Missouri Contractors Have When Storing Homeowners’ Property

General Contractors Vice & Tools

Contractors’ Rights on a Remediation Project

The phone rings at 5am.

It’s a call from the insurance adjuster.

One of their insured clients’ home flooded.

Your company is tasked with performing the remediation work after the flood. As part of the work, you had to remove personal property for the homeowner.

You also agreed to store the personal property for the homeowner, and you’re billing the homeowner an agreed upon amount for said storage.

After you have completed all of the work, the homeowner refuses to pay your company for the work and will not pay for the transportation of the personal property to storage, or for the storage of the goods. The owner refuses to pay anything, claiming that the work was defective.

What are your rights?

This article was written by a St. Louis Construction Lawyer and is designed to provide general guidance for Missouri contractors with respect to rights against a homeowner when personal property is transported and stored in conjunction with a remediation project.  

However, the information in this article should never be used as a substitute for advice from a competent construction lawyer, as the facts of each case will be determinative of the contractors’ rights.

Below is a discussion on contractors’ rights against homeowners in the event of nonpayment as it pertains to (1) the work performed, (2) the transportation costs of the personal property, and for (3) the costs of storage for the property.

1. Lien Rights for Transporting Consumer’s Personal Property

The Uniform Commercial Code provides that a warehouseman has a lien on goods that are in his possession for charges for storage, transportation, insurance, and/or labor.  R.S.Mo. § 400.7-209 (2015).

The lien on the personal property does not include a lien on the personal property for the amounts incurred by the homeowner for the remediation services—meaning that the lien only applies to the amount owing for the storage, transportation, and labor (to transport and store the personal property).

“If storage charges are due, a bailee…can assert a warehouseman’s lien under § 400.7-209, RSMo 1978. He may retain the goods or sell them.

If an action is brought against the bailee, he can assert his enforcement of its lien as a defense to his non-delivery. See § 400.7-403(1)(c).” Church v. Richfer Corp., 618 S.W.2d 29 (Mo., 1981). This means that the contractor has the right to hold the personal property as collateral for payment for the transport and storage of the goods.

2. Right to Hold the Owner’s Property for Non-Payment

Generally, you have the right to hold the owner’s property until the debt is satisfied (lien is paid off). After the lien is paid off, who has the responsibility of transporting the property back to the owner? This is likely a subject of negotiation between the parties.  The contractor can often accomplish such a task much easier that the owner as the contractor was the party that moved the property in the first place. Carpenter Tools on Wall If the contractor is responsible for returning the property, however, in most instances, Missouri law may permit them to roll that expense into the warehouseman’s lien on the property. The statute allows the lien for general transportation and storage. Additionally, the insurance company will likely cover, most if not all, of the bill. The contractor can’t rack up exorbitant expenses during the transportation, however, they have to be reasonable. If it’s a large amount of property, the expenses may rise proportionately.

3. Right to Sell the Consumer’s Personal Property

Yes, if you provide the proper notice and strictly comply with the foreclosure procedure enumerated in the Missouri statutes, you can liquidate (foreclose on) the homeowner’s personal property to satisfy the amounts due to you.

As a rule of thumb, a sale of more goods than is apparently necessary to insure satisfaction of the amount owed is not commercially reasonable, except in rare cases.

4. Right to Waive Negligence During the Storage and/or Transport of the Homeowner’s Property

A warehouseman can potentially be held liable for damages to the goods if that damage is the result of the contractor’s failure to exercise the care of an ordinarily prudent person would exercise under like circumstances.

The property owner and the warehouseman have what’s called a bailment relationship.

The bailment, by virtue of the relationship between the owner and the contractor, creates a duty to exercise ordinary care when handling and storing the property.

Can the Contractor Include a Provision in the Contract to Absolve Himself from Liability?

Yes. The Uniform Commercial Code, which was adopted by Missouri, allows the warehouseman to limit the liability exposure to the bailor or, in essence, to waive claims of negligence:

“Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage, and setting forth a specific liability per article or item, or value per unit of weight, beyond which the warehouseman shall not be liable…” R.S.Mo. § 400.7-204

5. Right to Terminate Homeowner’s Storage Lease

A warehouseman may on notifying the person on whose account the goods are held and any other person known to claim an interest in the goods require payment of any charges and removal of the goods from the warehouse at the termination of the period of storage fixed by the document, or, if no period is fixed, within a stated period not less than thirty days after the notification. If the goods are not removed before the date specified in the notification, the warehouseman may sell them in accordance with the provisions of the section on enforcement of a warehouseman’s lien (section 400.7-210). Section 400.7-206.1

Is a Missouri Contractor who stores a Homeowner’s Property governed by the Missouri Warehouse Statute and Self-Storage Facilities Statute?

Chapter 415 of the Missouri Revised Statutes sets forth the persons, entities, and subject matter that govern self-storage facilities.

Most notably, Chapter 415 designates the term “operator” as the owner, operator, lessor or sublessor of a self-service storage facility.

R.S.Mo. Section 415.405, which is the definitions section of Chapter 415, lays out two relevant definitions: (1) Operator and (2) Self-service Storage Facility.

  • Operator is “the owner, operator, lessor or sublessor of a self-service storage facility, or an agent or any other person authorized to manage the facility; except that, the term “operator” does not include a warehouseman, unless the operator issues a warehouse receipt, bill of lading, or other document of title for the personal property stored.
  • Self-Service Storage Facility – “any real property used for renting or leasing individual storage spaces in which the occupants themselves customarily store and remove their own personal property on a self-service basis”

According to the definitions section, operator under the self-storage statutes specifically excludes a “warehouseman.”

Therefore, the Self-Service Storage Facility statutes do not govern contractors who transport and store personal property in conjunction with a remediation project.

What is the Procedure for Foreclosing on a Warehouseman’s Lien in Missouri?

Except as provided in subsection (2), a warehouseman’s lien may be enforced:

  • by public or private sale of the goods in bloc or in parcels,
  • at any time or place and on any terms which are commercially reasonable,
  • after notifying all persons known to claim an interest in the goods.

R.S.Mo. Section 400.7-210. (1)

What does the Lien Sale Notice Have to Include?

  • the amount due,
  • the nature of the proposed sale, and
  • the time and place of any public sale.

*All sales must be carried out in a commercially reasonable manner.

How is Commercially Reasonable Manner Defined?

R.S.MO. 400.9-627 sets forth the elements to categorize a sale as conducted “in a commercially reasonable manner,” as follows, if the disposition is made:

(1) In the usual manner on any recognized market;

(2) At the price current in any recognized market at the time of the disposition; or

(3) Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.

Other methods of carrying out a collection, enforcement, disposition, or acceptance will be commercially reasonable if approved:

(1) In a judicial proceeding;

(2) By a bona fide creditors’ committee;

(3) By a representative of creditors; or

(4) By an assignee for the benefit of creditors.

* The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner.

Enforcement of a Warehouseman’s Lien on Goods Other than Merchant Stored Goods

A warehouseman’s lien on goods other than goods stored by a merchant in the course of his business  may be enforced only as follows:

(a) All persons known to claim an interest in the goods must be notified;

(b) The notification must be delivered in person or sent by registered or certified letter to the last known address of any person to be notified;

(c) The notification must include an itemized statement of the claim, a description of the goods subject to the lien, a demand for payment within a specified time not less than ten days after receipt of the notification, and a conspicuous statement that unless the claim is paid within that time the goods will be advertised for sale and sold by auction at a specified time and place

(d) The sale must conform to the terms of the notification.

(e) The sale must be held at the nearest suitable place to that where the goods are held or stored.

(f) After the expiration of the time given in the notification, an advertisement of the sale must be published once a week for two weeks consecutively in a newspaper of general circulation where the sale is to be held.

The advertisement must include a description of the goods, the name of the person on whose account they are being held, and the time and place of the sale. The sale must take place at least fifteen days after the first publication.

Conclusion

Each case is fact specific.

However, the above describes the general laws that govern a frequent situation in the construction remediation industry.

It is commonplace for contractors performing remediation work to transport and store an owner’s property.

As you can see above there are very specific statutes regarding the Missouri laws that apply to the storage of an owner’s property.

The above discussion includes a few questions that contractors often ask their attorney and the law pertaining to such questions.

Please note that this article is only a general discussion and should not be applied to your case unless and until you consult an experienced construction lawyer to evaluate your specific factual circumstances.

If you are in a similar situation, you should contact an experienced construction law attorney to advise you as there may be statutory nuances that affect your rights.

The above is merely general information regarding statutes and case law in Missouri, which pertain to contractors’ rights on a construction project.

A lawyer should always evaluate the facts of your case to determine whether these rights are applicable.

5 Thoughts on Mechanic’s Lien Notice Law in Missouri

Big Construction Bulldozer

St. Louis Attorney Discusses Mechanic’s Lien Notice

Notice is an important part of the lien process.  In fact, it’s an indispensable part.  Without notice, you cannot have a valid mechanic’s lien in Missouri.

This article aims at educating the reader on 5 different thoughts surrounding Missouri mechanic’s liens and a few facts you should probably know if you’re a construction company owner or contractor.

First, let’s look at the notice that general contractors need to provide.

1.   General Contractors Must Provide 429 Lien Notice

A general contractor is required to provide notice for every mechanic’s lien.  The statute, R.S.Mo. section 429.012, even states that provision of the 429 notice is a condition precedent “to the creation, existence or validity of any mechanic’s lien in favor of such original contractor.”

So, what is 429 notice?  It is notice to the owner to alert them that they could pay for materials twice if they do not obtain lien waivers from the general contractor.

The 429 lien notice must state the following in ten-point bold type font:

NOTICE TO OWNER

FAILURE OF THIS CONTRACTOR TO PAY THOSE PERSONS SUPPLYING MATERIAL OR SERVICES TO COMPLETE THIS CONTRACT CAN RESULT IN THE FILING OF A MECHANIC’S LIEN ON THE PROPERTY WHICH IS THE SUBJECT OF THIS CONTRACT PURSUANT TO CHAPTER 429, RSMO. TO AVOID THIS RESULT YOU MAY ASK THIS CONTRACTOR FOR “LIEN WAIVERS” FROM ALL PERSONS SUPPLYING MATERIAL OR SERVICES FOR THE WORK DESCRIBED IN THIS CONTRACT. FAILURE TO SECURE LIEN WAIVERS MAY RESULT IN YOUR PAYING FOR LABOR AND MATERIAL TWICE.

2.   Subcontractors Must Provide Notice of Intent

In order to have valid lien rights on a Missouri construction project, a subcontractor has to give a notice of intent 10 days prior to filing the mechanic’s lien.

As you may be aware, the lien law in Missouri is six months from the last day worked or materials were supplied.  As such, you must provide notice of intent to lien more than 10 days prior to the mechanic’s lien filing deadline because 10 days must pass before filing a mechanic’s lien.

The mechanic lien notice requirement for a Missouri subcontractor is set forth under 429.100, and states the following, in pertinent part:

Every person except the original contractor, who may wish to avail himself of the benefit of the provisions of sections429.010 to 429.340, shall give ten days’ notice before the filing of the lien, as herein required, to the owner, owners or agent, or either of them, that he holds a claim against such building or improvement, setting forth the amount and from whom the same is due.”

Who can serve the lien notice?

“Such notice may be served by any officer authorized by law to serve process in civil actions, or by any person who would be a competent witness.” R.S.Mo 429.100

3.   Notice will Always Be Required by a Lien Claimant

As discussed above, notice is required by a general contractor and is found under 429.010.

Because a general contractor always has to give notice pursuant to section 429 of the Missouri Revised Statutes, the general contractor should have all contracts and other documentation relating to the project chocked full of 429 notice language.

That way, if there’s a question about notice, and all of your paperwork shows the 429 notice language, then you can easily prove that notice was provided.

Additionally, all subcontractors must provide notice of intent as described above.  That makes up all potential mechanic’s lien claimants on the project.

Thus, notice must be given by any party who wishes to file a mechanic’s lien on the project.

For any subcontractors who need assistance in providing a notice of intent to file a mechanic’s lien statement, please contact one of our construction attorneys.

4.   Lien Notice Compliance is Critical

Mechanic’s liens are creatures of statute as the Missouri courts love to say.  From a practical standpoint this means that because mechanic’s lien rights are created through the statute, the lien claimant typically has to strictly comply with the statutory requirements.

If a contractor does not provide lien notice, it will be fatal to the lien. (Note: there is an exception case in Missouri where the court did not require notice, but it is an extreme rarity)

That’s why contractors should know what type of notice they have to provide (depending on their role on the project).

In addition to knowing what type of notice you need to provide, your documentation, such as contracts and invoices, need to be in compliance with Missouri lien statutes.

In order to properly prepare documentation to preserve your lien rights, you should consult with an attorney in the county in which you need to file the lien.  This is the county where the project is located.

For help with mechanic’s liens in Jefferson County, St. Charles County, or St. Louis County, West County, or Ste. Genevieve County, please contact one of our mechanic’s lien attorneys here.

5. Subcontractors and Suppliers Will Rarely, if Ever, Have Lien Rights on a Residential Property of 4 Units or Less

Because Missouri lien law requires written consent from the owner of a residential property, you will rarely, if ever, have lien rights on such project.  Why?

Because the statute requires the consent of the owner.

R.S.Mo. Section 429.013 prohibits a subcontractor from having a lien on owner-occupied residential property (of 4 units or less):

unless an owner of the building or structure pursuant to a written contract has agreed to be liable for such costs in the event that the costs are not paid. Such consent shall be printed in ten point bold type and signed separately from the notice required by section 429.012 and shall contain the following words:

CONSENT OF OWNER

CONSENT IS HEREBY GIVEN FOR FILING OF MECHANIC’S LIENS BY ANY PERSON WHO SUPPLIES MATERIALS OR SERVICES FOR THE WORK DESCRIBED IN THIS CONTRACT ON THE PROPERTY ON WHICH IT IS LOCATED IF HE IS NOT PAID.” R.S.Mo. 429.013.2

In order for any subcontractor to have valid lien rights on an owner-occupied residential building of four units or less, the subcontractor must attach “a copy of a consent in the form prescribed in subsection 2 of [R.S.Mo.] section [429], signed by an owner, [] to the recording of a claim of lien.” R.S.Mo. 429.013.3

For that reason, it may be advisable to have a direct contract with the owner of the property when working on such residential units.

A direct contract can have advantages and disadvantages. Accordingly, You should discuss the specifics of your case with a knowledgeable construction law attorney.

As the statute sets forth above, the general contractor on the project would have to obtain consent from the owner.

A general contractor’s main goal is to land the job with the owner of the project, whether that be an owner of commercial property, owner of large residential property (apartment complex/condominiums), or even a homeowner.

Obtaining consent from the owner in order for subcontractors to have the right to file mechanic’s liens will not be a shining badge that will be well-received by the homeowner.  In fact, it could be a deal breaker for the owner.

Accordingly, rarely, if ever, will a general contractor ask the owner of a construction project to sign a consent to lien form.

Mechanic’s Lien Attorney in St. Louis

Filing a mechanic’s lien is a detail-intensive task because you have to strictly comply with the statutes in order to avoid lien vitiation.

On top of that, there are numerous statutes regarding notice, lien requirements, and other caveats depending on the factual circumstances of your case.

You should always consult a construction law attorney if you are seeking to collect on a construction project.

If you need a lawyer to help you file a mechanic’s lien in the St. Louis area, you can contact a lien lawyer here.

St. Louis OSHA Violations Attorney

OSHA workers

Navigating OSHA Laws

As a construction company, you face an incredible amount of regulations.  After an OSHA violation, you should seek the guidance of a lawyer who knows the process.

In Missouri, it’s apparent that most employers’ goals are to provide a safe and healthy work environment for their employees.  Construction projects are no exception.  However, construction projects can pose some of the biggest risks and can involve some very complex work.

As a result, the contractor is tasked with a laundry list of regulations to follow such as dealing with OSHA and other regulatory compliance matters.  Consequently, it is quite difficult for a contractor to always remain in compliance with OSHA and other regulatory laws.

We understand how difficult this task can be, and our attorneys can counsel you to prevent potential OSHA violations.

In the event that you are already dealing with a violation, our lawyers can help you recover from the OSHA Violation(s) by guiding you through the appeal process.

Remember the old adage, “an ounce of prevention is worth a pound of cure.”

If you contact us early enough, our lawyers may be able to save you worlds of trouble by preparing and preempting a potential investigation by an OSHA inspector and allowing your company to avoid unnecessary fines as a result of OSHA violations.

If your company is cited for violating OSHA laws, you should hire an attorney who knows the regulations and knows how to deal with the authorities. We can provide assistance for your OSHA violations and advise you on how to prevent such violations or similar occurrences in the future.

Further, our attorneys are cognizant of the importance of minimizing costs and will negotiate with the Department of Labor accordingly.

If you or your company is dealing with a citation for an OSHA violation, contact a St. Louis attorney who is knowledgeable in this area.

St. Louis Construction Defect Lawyer

Demolition of Building

Litigating Construction Defect Claims

The Construction industry has numerous complexities and a lot of moving parts.  After performing hundreds a projects an experienced contractor will inevitably face defects in the work of one of the subcontractors on the project.

When the construction work is defective, someone will have to incur additional expenses.  As we all know, the likelihood that someone will voluntarily assume the expenses is low to non-existent.

Therefore, when a defect occurs on a construction project, the contractor has to immediately think that the dispute may result in litigation.

Consequently, the contractor should prepare the documentation and take any proper steps preparing to litigate the dispute, which usually should include the retention of an attorney.

While this cynical approach was not intended to encourage lawsuits, the reality is that contractors need to be precautious in order to protect themselves if the dispute proceeds to litigation.

One important tip is to maintain organized and thorough documentation. Maintaining proper documentation can greatly reduce attorney’s fees and expedite resolution of the matter.

First, and ideally before a construction defect claim arises, make sure to keep detailed records of the project, including all correspondence.

It is important to document all communications between the parties on a construction project because the contract and ultimately the parties’ intent may be determinative of the outcome in a construction defect case.

The documentation of the parties’ communications may be important because the communications may speak to the intent.

Additionally the communications may be fuel for the construction defect lawyer to use throughout the litigation.

Damaging statements by the opposing side can be your attorney’s sword to leverage you into a favorable settlement or assist you in collecting payment on the project

Even if you are unable to adequately prepare, we have construction lawyers who can help you fight through the process and either get you the compensation to which you are entitled or to require the subcontractor to make any and all necessary repairs to rectify the shoddy work.

Assistance with Your Construction Defect Claim

Construction can often be a complex process, and not all companies are suited to perform construction work.

Other companies are well-equipped to perform the same but still may find themselves dealing with construction defect claims.

Regardless of where your company falls, defect claims will arise in the construction context.

If/When that situation occurs, we have attorneys who are well-versed in handling construction defect claims from start to finish, and we would be glad to review your case.

If you need assistance with a matter, please contact a construction law attorney at our firm.

If you are need of a construction litigation attorney, please contact one of our lawyers.