Missouri Mechanic’s Lien Law Questions
What is a Mechanic’s Lien?
A mechanic’s lien is a means, created by statute, for suppliers of labor and/or materials to put a security interest onto real property in order to ensure payment of the work performed or materials provided.
A mechanic’s lien is a hammer for general contractors and subcontractors that need to collect payment on a construction project.
In Missouri, a lien is a way for the unpaid contractor or supplier to put an encumbrance on the real property without having to request an order from the court.
The contractor or supplier can simply file a mechanic’s lien statement with the Circuit Court in the county in which the property is located.
The interesting part about a mechanic’s lien is that the owner may have paid the general contractor, but an unpaid subcontractor or supplier can still encumber the property.
This means that the owner may ultimately pay twice for the work performed on the project.
Because there are strict requirements for filing a mechanic’s lien, contractors should contact an experienced construction law lawyer to assist them in preparing the same.
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How does a Mechanic’s Lien Work?
A mechanic’s lien is a statutorily created means for a contractor to take a security interest in property upon which the contractor has performed work.
This is a safeguard chiseled out by the legislature for the benefit of contractors and subcontractors performing on construction projects.
Once a mechanic’s lien is properly filed in the Circuit Court of the county in which the subject property is located, the lien sits idly on the property.
Look under the: “How does filing a mechanic’s lien get me paid” section for an explanation as to how an idle mechanic’s lien may still be working for you (at least from a practical standpoint).
After six months of sitting idly, the mechanic’s lien can be vitiated and cleared from the title. However, during the six months, a good construction law attorney will fully utilize the power of the lien and foreclose on the same.
The foreclosure of the lien is effectuated by the attorney’s filing of a petition. This will institute the lawsuit that forecloses on the property (sells the property) in order to pay the lien off as well as any other encumbrances that exist at the time of the sale of the property.
As far as pecking order on the payout after the foreclosure sale, the encumbrances that have priority will be paid first. The remaining funds left over after the most senior encumbrance is paid off would then trickle down to the next party in line.
Because a mechanic’s lien can be rendered invalid if too much time passes, you should immediately consult with a construction lawyer to find out your timeline and how to best proceed in collecting for work performed on the construction project.
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How does filing a Mechanic’s Lien get me Paid?
A mechanic’s lien is a hammer in the construction law realm. It attaches to an owner’s property, and if properly filed, cannot be vitiated unless 6 months pass without the contractor foreclosing upon the lien.
Often times property is not paid off by the owner and rather there is a mortgage & note on the property which is given by some lender, whether that be a financial institution, bank, or credit union. The property and structures thereon are typically used as collateral to secure the note. The mortgage, or in Missouri, more properly termed deed of trust, reflect the fact that the lender has a security interest in the property.
A mechanic’s lien is also a form of security interest in the property. Thus, when a mechanic’s lien is filed, and a lender has a security interest in the property in question, there may be some issues as to who has priority in the collateral (property/buildings).
Because property is usually not paid off and is subject to the note that was used to purchase the same, the lender includes a provision in the deed of trust (or mortgage), which allows acceleration of the note in the event that there is a competing security interest. The mechanic’s lien, in this case, would be the competing security interest.
Therefore, from a practical standpoint, the owner faces incredible pressure from a few things: (1) there is an encumbrance on his/her property, (2) the note, which may be an exorbitant amount (and was originally intended to be paid over the course of 30 years or some other term), may be immediately due in full upon the filing of the mechanic’s lien–this is a result of the lender invoking the acceleration clause.
As soon as the lender invokes the acceleration clause, there is extreme pressure on the owner of the property to either get the lien off the property (which usually means payment), or to pay the note in full, which is often impossible or impracticable for the owner. This may force the owner to simply pay off the lien.
For the foregoing reasons, a mechanic’s lien is a very powerful tool for a contractor to force payment on a project where he has not yet received payment.
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What are the costs to file a Mechanic’s Lien in St. Louis?
A mechanic’s lien in St. Louis can be a relatively costly endeavor (depending on the project size).
Any construction lawyer that is diligently performing his/her work will most likely, prior to preparing the lien, run a title report, or what we call an O&E report (Ownership & Encumbrance report), that traces the chain of title. This is important because it also locates all parties that have an interest in the real property upon which the lien is to be filed.
Because one of the requirements of filing a mechanic’s lien includes notice to all parties with an interest in the property, it is critical to know who has an interest in such property. These title reports range from $100 to $500 or more depending on the complexity of the property, legal description, and depending on the title company that is preparing the O&E report.
In addition to the O&E report, there will be a small cost of filing a mechanic’s lien in the Circuit Court of St. Louis County.
The website of the 21st Judicial Circuit Court of St. Louis County, Missouri has a filing fee listed as $5.00. See https://www.stlouisco.com/Portals/8/docs/document%20library/circuit%20court/circuit%20court%20pages/CirClerkFees2015.pdf for other filing fees at the St. Louis County Circuit Court.
Further, each mechanic’s lien must be served in a specific manner that is in accordance with the statutes of Missouri. Thus, there will also be service fees depending on whether the sheriff or a special process server is used.
On top of the foregoing costs, a construction lawyer will be preparing the mechanic’s lien and depending on the lien, could spend several hours preparing the same. Accordingly, you will also incur a fair amount of attorney’s fees.
Keep in mind that some construction lawyers are flexible and will agree to a non-hourly fee arrangement. For example, the lawyer may be willing to take the case on a contingency basis.
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What are the Costs to File a Mechanic’s Lien in St. Charles County Circuit Court?
The filing fees for a mechanic’s lien in St. Charles County Circuit Court, or what is sometimes referred to as the 11th Judicial Circuit Court, are $5. The filing fees for other cases in St. Charles can be found here.
Keep in mind that the total fees will not only be $5. You will have service fees and attorneys fees as well.
Any time you are filing a mechanic’s liens, you need to be sure to serve the proper parties. This requires a title search to ensure that you are informing all parties with an interest in the property. A title search may be another expense incurred in the mechanic’s lien filing process.
Additionally, if you hire an attorney, you will incur attorney’s fees.
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What are the 4 Mechanic’s Lien Requirements in St. Louis?
In addition to any notice required, the applicable statute, Section 429.080 of the Missouri Revised Statutes, generally sets out four requirements to properly file a mechanic’s lien statement:
(a) a just and true account of the demand;
(b) a true description of the property, or so near as to identify the same;
(c) the name of the owner or contractor, or both if known to the person filing the lien; and
(d) verification by the oath of himself or some credible person for him
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Who Must be Made a Party in the Mechanic’s Lien Lawsuit?
Missouri Revised Statutes section 429.190 states
- all persons who were parties to the contract must be parties
- all persons who are “interested in the matter in controversy” or in the property charged with the lien may be parties
- If the interested persons are not made parties, however, then the Court will not be able to bind them with the rulings in the proceeding
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Do I have to have a written agreement to file a Missouri Mechanic’s Lien?
No. However, there are certain notice requirements that have to be provided to the owner prior to the filing of a lien. If these notices are not provided, the lien could have deficiencies and ultimately be rendered invalid (vitiated).
The FAQs throughout this website discuss the importance of the various lien notices that need to be given on construction projects.
The notice of intent to file a mechanic’s lien statement as well as the 429 notice that needs to be provided to the owner (warning of the danger of double payment if lien waivers are not secured) are two examples of required notice that subcontractors and contractors have to give, respectively.
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What is a general contractor’s duty when a mechanic’s lien is filed in Missouri?
R.S.Mo. section 429.140 states the following, generally:
If anyone other than the general contractor files a lien, the general contractor has the duty of defending any action brought to foreclose on the lien. The general contractor shall defend such suit, at his own expense.
The owner has the right to withhold the amount of money that the lien was filed for and in the event that the plaintiff foreclosing on the lien takes judgment, the owner is allowed to deduct the amount of the judgment and costs from any amount owed to the contractor.
The owner then has rights to indemnification from the general contractor for amounts for which the general contractor was originally liable.
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What Statute Creates Missouri Mechanic’s Liens?
Chapter 429 of the Missouri Revised Statutes governs mechanic’s liens. Specifically, section 429.010 of the Revised Missouri Statutes sets forth the rights of persons providing work, labor or supplies on a building, erection, or improvement, and grants them lien rights.
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How Long Do you Have to File a Mechanic’s Lien in Missouri?
Section 429.080 of the Missouri Revised Statutes governs the amount of time that a claimant has to file a mechanic’s lien. The specific language of the statute says the mechanic’s lien must be filed “within six months after the indebtedness shall have accrued.” The indebtedness is typically deemed to be accrued on the last day the work is performed.
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I know I have 6 months to file a Mechanic’s Lien, but when does the clock start ticking?
Generally, a contractor has 6 months from the date the work was last performed on the project or from the date that materials were last supplied to the project. The actual language is: the lien must be filed: “[w]ithin six months after the indebtedness shall have accrued …” R.S.Mo. § 429.080.
“The date the ‘indebtedness has accrued’ is the last day work was performed or material incorporated.” Midwest Floor Co. v. Miceli Dev. Co., 304 S.W.3d 247.
This makes the last day work performed or material incorporated an important date for contractors to pay attention to when performing construction work.
This date is strictly measured by work performed pursuant to the contract.
After the owner accepts the work as substantially complete on the project, any further labor provided by the contractor is not lienable. Brown v. Davis, 249 S.W. 696, 698 (Mo.App.St.L.1923).
The foregoing statement, thus, means that a contractor does not have lien rights for work that is performed pursuant to a warranty or for repairs performed as the result of a callback from the owner.
Here’s an excerpt of applicable case law: “A subcontractor cannot, after the termination of an account, extend the mechanic’s lien filing time by rectifying some fault of his in performing the contract.” S & R Builders & Suppliers, Inc. v. Marler, 610 S.W.2d 690, 693 (Mo. Ct. App. 1980).
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Does my work have to improve the property to be able to file a Mechanic’s Lien?
In the case of Brownstein, the Missouri Supreme Court addressed the issue of improvements in the context of an architect’s lien, stating the following: “To hold that § 429.015.1 allows an architectural lien to attach where the services of an architect are not employed in “erection or repair of any building or other improvement” would fly against the plain meaning of the statute’s terms.” Brownstein v. Rhomberg-Haglin and Associates, Inc., 824 S.W.2d 13, 16 (Mo., 1992).
The Court goes further to state: “[t]o qualify, the person seeking the lien must have provided in his professional capacity either labor or materials used for improving the land.” Id. This extended to the work performed by the architect, if the contractor generally used the plans to perform improvements on the construction project.
“The legislature did not intend a mechanic’s lien to attach where none of the labor or materials of the builder were used in the improvement of the property. To qualify (for a lien) the person seeking the lien must have provided in his professional capacity either labor or materials used for improving the land.” Space Plan. Arch. v. Frontier Town-Missouri, 107 S.W.3d 398 (Mo. App., 2003).
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When is Machinery Lienable?
“The intention of [Missouri] law is to give a lien where the machinery furnished is intended by the owner to become a part of the building, manufactory, or plant; and it is immaterial whether this occurs when the building was originally constructed, or when the owner converts an existing building into a manufacturing.” plant. Bush Machinery v. Kansas City Factory, 81 S.W.3d 121 (Mo. App., 2002) (citing Progress Press-Brick Machine Co. v. Gratiot Brick & Quarry Co., 151 Mo. 501, 52 S.W. 401, 402 (1899)).
“The Supreme Court of Missouri held that the meaning behind the mechanic’s lien statute: indicates that that machinery must be such as is used in the erection of a building, and which will, when placed in the building, erection or improvement on the land, become a fixture, and become a part of the realty, or at least such as is necessary in the erection of the improvement to be made.” Bush Machinery v. Kansas City Factory, 81 S.W.3d 121 (Mo. App., 2002)(citing Springfield Foundry & Machine Co. v. Cole, 130 Mo. 1, 31 S.W. 922, 924 (1895)(quoting Graves v. Pierce, 53 Mo. 423, 428-29 (Mo.1873)).
“Further, because the machinery in that case was not placed in the building, it: became no part of the realty, and no improvement thereon; and inasmuch as the machinery placed in said building was not placed therein in the erection of said building or as an improvement thereto, but was placed there solely for mining…, it formed no part of said building, but remained personalty, and plaintiff was not entitled to a mechanic’s lien.” Bush Machinery v. Kansas City Factory, 81 S.W.3d 121 (Mo. App., 2002).
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Does Every Piece of Material have to go into the Structure to have a Valid Missouri Mechanic’s Lien?
“In order to maintain a lien for materials furnished, it is not necessary in all cases that such materials should actually have gone into the structure and form a part thereof. It is sufficient that their use was necessary, and they were, in fact, used or consumed in the building.” Oliver L. Taetz, Inc. v. Groff, 253 S.W.2d 824, 363 Mo. 825 (Mo., 1953)(citing Rapauno Chem. Co. v. Greenfield & N. Ry. Co., 59 Mo.App. 6.
The Court went on to find that heating oil was lienable. It also stated that other minor items which were necessary for use on the construction project like brushes and steel wool were also found to be lienable items. Oliver L. Taetz, Inc. v. Groff, 253 S.W.2d 824, 363 Mo. 825 (Mo., 1953).
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What happens if My Mechanic’s Lien Accounting is Inaccurate? What is a Just and True Account?
A lien statement may be regarded as just and true if it contains mistakes or errors of omission, as long as those inaccuracies are unintentional and are the result of honest inadvertence, accident, or oversight, and do not result from deliberate intention or design. Dave Kolb Grading, Inc. v. Lieberman Corp., 837 S.W.2d 924 (Mo. App. E.D., 1992)(citing Putnam v. Heathman, 367 S.W.2d 823, 829 (Mo.App.1963)).
Another case states: “`A lien statement may be regarded as just and true, so as not to vitiate the entire lien, if the inclusion of a nonlienable item is the result of honest mistake or inadvertence without intent to defraud and if the nonlienable items can be separated from the lienable items.'” Glenstone Block Co. v. Pebworth, 264 S.W.3d 703 (Mo. App., 2008)(citing Am. Prop. Maint. v. Monia, 59 S.W.3d at 643)(quoting Dave Kolb Grading, Inc. v. Lieberman Corp., 837 S.W.2d 924, 941 (Mo. App. E.D., 1992)).
Although there is no precise definition of “just and true,” whether a lien statement meets those requirements depends upon the facts of each particular case. Dave Kolb Grading, Inc. v. Lieberman Corp., 837 S.W.2d 924 (Mo. App. E.D., 1992)(citing Sears, Roebuck & Co. v. Seven Palms Motor Inn, Inc., 530 S.W.2d 695, 698 (Mo. banc 1975)).
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Can General Contractors Include Work Performed by Subcontractors in their Mechanic’s Liens?
Generally yes. As long as the general contractors are not attempting to “double dip,” Missouri courts, citing the remedial purpose of the mechanic’s liens statutes, will allow a general contractor to include the work of a subcontractor in its lien:
We are to construe the statute “as favorably to the materialman as its terms permit.” Midwest Floor Co. v. Miceli Dev. Co., 304 S.W.3d 243, 248 (Mo. Ct. App. 2009).
“Therefore, we hold that lien claimants may include the work performed by subcontractors in their mechanics’ lien.” Id.
Missouri Mechanic’s Lien Notice
What is 429 Notice Pursuant to Missouri Mechanic’s Lien Law?
429 Notice is the typical lingo used by construction law lawyers that refers to the notice that contractors need to provide to preserve the right to file a lien on property. R.S.Mo section 429.012 lays out the requirements for 429 lien notice.
The statutory language needs to be given to the owner to preserve the lien rights and requires that the following language be used:
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.
A good construction law attorney will ensure that this language is contained in your contract, your invoices, and any estimates provided to the owner.
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When does 429 Mechanic’s Lien Notice Need to Be Given by the Contractor?
R.S.Mo Section 429.012 requires that the lien claimant provide notice to the owner or to the person with whom the contractor has a contract, “prior to receiving payment in any form of any kind from such person.”
The applicable statute continues by enumerating several times when the notice should be provided:
(a) at the time of the execution of the contract
(b) when the materials are delivered
(c) when the work is commenced, or
(d) delivered with the first invoice
A good construction law lawyer will insert the above language into most of your documentation, including the construction contract, the invoices, estimates, and any correspondence that you send to the owner. This will remove all doubt as to whether the proper notice was required. For that reason, it is important to contact a construction law attorney to make sure that you are in compliance with not only the 429 mechanic’s lien notice, but all statutory requirements.
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Who needs to give 429 Mechanic’s Lien Notice and to whom does it need to be given?
Every original contractor has to give the notice. The notice needs to be given to the person with whom the contract is made, or if there is no contract, then notice needs to be given to the owner.
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What Happens if You Fail to Provide the 429 Mechanic’s Lien Notice?
The lien will be invalid and the owner’s title will be free of any such liens. The applicable statutory section is R.S.Mo. section 429.012.2, which states “[c]ompliance with [429 mechanic’s lien notice] shall be a condition precedent to the creation, existence or validity of any mechanic’s lien in favor of such original contractor.”
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What Notice Does a Subcontractor Have to Provide Before Filing a Missouri Mechanic’s Lien?
The notice depends on whether the subcontractor is performing work on a residential or commercial project. It also depends on whether the project is owner-occupied and whether the property contains four units or less. R.S.Mo. § 429.013.1. The definitions of owner-occupied, residential property, and other terms that are relevant to subcontractors’ lien notice requirements are set forth throughout these FAQs. R.S.Mo. § 429.013.1.
If the subcontractor is filing on residential property of four units or less that is owner-occupied, then the subcontractor must have a consent of owner, which states the following:
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.
The owner must also sign a document containing the above notice, and such notice and signature must be attached to the lien. If there are multiple owners, the signature of one of the owners will be satisfactory to represent that of all of the owners. R.S.Mo. § 429.013.3.
If the subcontractor does not have the above-described notice signed by the owner of residential property of four units or less and said residential property is owner-occupied, then the subcontractor does not have lien rights on the property, despite providing notice of intent to lien or any other notice.
In any case, if the subcontractor complies with the rigorous standards of 429.013 or does not fall within the purview of said statute, the subcontractor will still have to provide the Notice of Intent to file a Mechanic’s Lien, regardless of whether the project is residential or commercial.
A fuller description of the notice of intent requirements are set forth below.
What does “Owner” mean under Missouri’s Subcontractor Lien Statutes?
Owner means “the owner of record at the time any contractor, laborer or materialman agrees or is requested to furnish any work, labor, material, fixture, engine, boiler or machinery.” R.S.Mo. § 429.013.1
What does Owner-Occupied Mean in the context of a Subcontractor Lien Filing on Residential Property?
Owner-occupied is the “property which the owner currently occupies, or intends to occupy and does occupy as a residence within a reasonable time after the completion of the repair, remodeling or addition which is the basis for the lien sought, pursuant to this section.” R.S.Mo. § 429.013.1.
What is considered Residential Property in the context of a Subcontractor’s Lien Filing in Missouri?
“[P]roperty consisting of four or less existing units to which repairs, remodeling or additions are undertaken. This section shall not apply to the building, construction or erection of any improvements constituting the initial or original residential unit or units or other improvements or appurtenances forming a part of the original development of the property.” R.S.Mo. § 429.013.1.
What is a Notice of Intent to File a Mechanic’s Lien?
Section 429.100 of the Missouri Revised Statutes states that all persons except the original contractor, who wish to file a mechanic’s lien, must provide 10 days’ written notice before filing the lien. Lawyers in the construction law industry call this 10 day notice the “notice of intent” to file a mechanic’s lien statement.
If you need help filing a notice of intent to file a mechanic’s lien contact one of our lawyers here.
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What language is required in the Notice of Intent to File a Mechanic’s Lien?
Pursuant to R.S.Mo. section 429.100, the notice of intent to file a mechanic’s lien must include information regarding the subcontractor and must state that said subcontractor holds a claim against the building or improvement (which will be the subject of the lien), and it must set forth the amount and from whom the same is due.
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How is proper service made regarding the Notice of Intent to File a Mechanic’s Lien?
Pursuant to R.S.Mo. section 429.100, the notice of the intent to file a mechanic’s lien should be served by any police officer authorized by Missouri law to serve process in civil actions, or by anyone who would be a competent witness.
In the event the notice of intent to file a mechanic’s lien is served by a police officer, the official return with an endorsement on it will be sufficient proof. However, when the notice of intent is served by any other person, the proof of service must be verified by affidavit of the person serving the same.
These service rules are an important part of properly serving the notice of intent and thus preserving one’s rights to file a subsequent mechanic’s lien.
However, Missouri courts have taken a more lenient approach on the basis of equitable principles, stating “the manner of service is immaterial where it clearly appears that the owner actually received adequate written notice not less than ten days prior to the filing of the lien claim.” Kingston Elec., Inc. v. Wal-Mart Properties, Inc., 901 S.W.2d 260 (Mo. App. E.D., 1995).
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Missouri Mechanic’s Liens Miscellaneous Laws
Who needs to be a party to a Mechanic’s Lien Foreclosure Action?
In all suits to foreclose on a Missouri Mechanic’s lien, the person foreclosing on such lien shall bring all other persons interested in the matter in controversy or in the property charged with the mechanic’s lien. R.S.Mo. 429.190
If the individuals/persons/entities are not made a party to the lien foreclosure action, then the parties will not be bound by such proceedings. R.S.Mo. 429.190
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When do I need to File a Release of a Mechanic’s Lien?
This is a very fact specific question better left for your attorney. Your attorney knows the specific facts, dealings between the parties, as well as whether payment has been received from the owner or general contractor on the project.
Typically, a lawyer would be well-advised to instruct his client to refrain from filing a release of mechanic’s lien until payment in full has been received and has cleared the bank. The release of mechanic’s lien is then filed which clears up the title.
It’s similar to what a bank or financial institution would file after a note is paid off. The mortgage or deed of trust (in Missouri) is then released by filing a release of deed of trust.
Releases of Mechanic’s liens should be treated similarly. Please note, however, that releasing a mechanic’s lien constitutes a release of an important substantive right to collect on the project. It is a big decision to release a lien, so you should always consult with an experienced construction lawyer before taking such drastic measures.
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Can I put a lien on City Hall if the Government fails to pay me on a Project?
No. When the government owns property, Missouri law forbids a lien because Missouri has a strong public policy against liens on public property. Not only would it be embarrassing for the governmental entity, but it would call into question the sovereignty of the state, city, or respective governmental entity.
The example above is City Hall, but this public policy applies to all buildings and/or property owned by governmental entities, whether that entity be a state, city, municipality, or even some quasi-private actor, who has a public purpose or is progressing the government’s objectives by protecting or serving the public interests.
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What Missouri Law Prevents me from Liening a Building Owned by a Public Entity?
Pursuant to Missouri Revised Statutes section 513.455, buildings owned by a governmental entity are protected from the attachment of a lien.
R.S.Mo. 513.455 states the following: “All courthouses, jails, clerks’ offices and other buildings owned by any county or municipality, and the lots on which they stand, and all burial grounds, shall be exempt from attachment and execution.”
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Can I put a Mechanic’s Lien on Property if Title is Held by Husband and Wife?
In Missouri, there is special protection carved out for a husband and wife who jointly own property. Typically a co-tenancy between a husband and wife would create a joint tenancy in many states, like Kansas for example.
In Missouri, however, a tenancy by the entirety is created when a husband and wife co-own a property. This type of co-ownership (tenancy by the entirety) creates a protection or shield on the property from creditors’ liens, unless both the husband and wife are debtors of the creditor filing the lien.
From a practical standpoint, this means that one of the spouses acting individually cannot subject the property to a mechanic’s lien. The contractor would have to have a contract with both the husband and wife.
In some Missouri cases, however, one of the spouses may act on behalf of the other (as their agent) and subject their property to a lien.
In such a case, the issue as to whether the non-participating spouse had sufficient participation in the transaction as to make them a responsible party will determine the validity of the lien.
One Missouri Court generally addresses these circumstances:
[I]t is now definitely established that the husband alone has no such interest in an estate by the entirety as can be subjected to a mechanic’s lien…nor will mere knowledge on the part of the wife that a building or other improvement is being erected on her real estate, and passive acquiescence therein on her part, be sufficient in and of itself to show that the husband acted as her agent in making the contract, so as to bind her personally, or warrant the charging of a lien against her property for the cost of materials entering into the construction of the building or improvement. [Citations omitted] Kurtz v. Field et al., 14 S.W.2d 9, 223 Mo.App. 270 (Mo. App., 1929).
In Boeckeler Lumber Co. v. Wahlbrink, the Court held that because the wife signed the deed of trust, note, and other documents to obtain financing, the Court said the wife was charged with acquiescing in the work. Consequently the property was lienable despite the tenancy by the entirety. Boeckeler Lumber Co. v. Wahlbrink, 177 S.W. 741, 191 Mo. App. 334 (Mo. App., 1915).
This is one reason why a contractor should always gather the appropriate information before beginning a project. Specifically, a contractor should at least ask the marital status of the party with whom the contractor is interacting or some other appropriate questions to determine the true legal owner of the property. In the event that any questions are raised, the contractor should pull the deed from the county’s recorder of deeds office.
Contractors should always consult with a construction lawyer as the lawyer can properly advise the contractor regarding his/her/its legal rights.
Contact one of our construction law attorneys to ensure that your contract is properly structured and the right parties are joined thereto in order to preserve your mechanic’s lien rights.
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What Happens if You Falsify a Mechanic’s Lien?
First off, a lien has to be notarized, which means you’ve publicly filed a false, sworn statement.
This type of conduct could have criminal ramifications, as the prosecution could try to make a perjury argument.
Additionally, you may face civil claims such as slander of title, which is the malicious publication of false words concerning title which result in damages for the plaintiff.
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What is a Slander of Title Claim in Relation to a Mechanic’s Lien?
The filing of a Mechanic’s lien with the wrong intentions, or abusing the process, can give rise to a slander of title claim.
“Slander of title has three essential elements: (1) false words concerning title to property; (2) malice in the publication of such; and (3) injury to the party whose title was slandered.” Arbors At Sugar Creek Homeowners Ass’n, Inc. v. Jefferson Bank & Trust Co. (Mo. App., 2014) (quoting Tongay v. Franklin Cnty. Mercantile Bank, 735 S.W.2d 766, 770 (Mo.App. E.D. 1987)).
Proof of falsity, alone, is not proof of malice. First Nat. Bank of St. Louis v. Ricon, Inc., 311 S.W.3d 857, 867 (Mo. Ct. App. 2010).
“To support an action for slander of title, there must be false words that are maliciously published, causing the plaintiff to suffer a pecuniary loss or injury.” First Nat. Bank of St. Louis v. Ricon, Inc., 311 S.W.3d 857 (Mo. App., 2010) (quoting V.J.M. Assoc., Inc. v. Gilmore,44 S.W.3d 440, 441 (Mo.App. E.D.2001)).
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What are the Damages Permitted in a Missouri Slander of Title Claim?
Compensatory damages, punitive damages, and attorneys fees may be recovered in a slander of title claim. See First Nat. Bank of St. Louis v. Ricon, Inc., 311 S.W.3d 857, 868 (Mo. Ct. App. 2010).
“[A]ttorney’s fees and other legal expenses incurred in clearing the disparaged title are recoverable as damages in the common law action of slander of title. Lau v. Pugh, 299 S.W.3d 740, 748 (Mo. Ct. App. 2009)(citing Rorvig v. Douglas, 123 Wash.2d 854, 873 P.2d 492 (1994)).
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Can I file a mechanic’s lien if I don’t have a contract with the owner?
Yes. Subcontractors, suppliers, and other persons or entities who provided labor or supplies on a construction project generally have the right to assert mechanic’s liens in Missouri, even if they do not have a direct contract with the owner.
However, the person or entity asserting the lien has to show a contractual chain or basically contractual privity between all the parties leading from the person or entity asserting the lien to the owner. Additionally, the lien claimant must comply with any remaining statutory requirements such as notice to interested parties, notarizing the lien, stating the amounts due and owing, and other applicable provisions discussed herein.
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What does it mean to be tiered out in the construction law context?
In the construction law context, attorneys refer to being “tiered out” as being too many tiers removed on a construction project. Each contractual relationship between two parties constitutes the creation of a tier. Some courts refer to a tier as the amount of contractual separation between the entity and the contractor.
So the example would be a second-tier contractor deals with a party that has a contractual relationship with the contractor.
When a party is too far removed, contractually, on certain projects, depending on the state and/or whether federal law is applicable, that party may not have lien rights on the property.
In Kansas, for example, in order to have valid lien rights, the entity must have at least had a contract with a subcontractor. If an entity has a contract with a subsubcontractor, then that entity will not have valid lien rights as it will be too far removed, or what is typically termed “tiered out” of its lien rights.
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Can I be tiered out of Mechanic’s Lien rights in Missouri?
In Missouri, a claimant is limited to a limited number of contractual tiers in which the contractor can be removed from the owner and still have valid lien rights.
Essentially this means that if a contractor if further removed than the supplier to a subcontractor, then that lien claimant’s right to file a mechanic’s lien no longer exists. In addition to falling into the limited tier requirement, the claimant must also prove that there’s a chain of contracts that leads back to the owner, then assuming all other statutory requirements are met, the claimant will have valid lien rights.
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Missouri Mechanic’s Liens Priority
Priority of Mechanic’s Liens in Missouri
The priority of a mechanic’s lien and a deed of trust in the construction law context is governed by when the document is recorded. However, there are special rules that are particular to construction that affect which encumbrance is senior to the other.
Let’s look at the specific rules.
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Does a Mechanic’s Lien take Priority over a Deed of Trust (Mortgage) in Missouri?
As noted above, this depends on the timing of the filing in either the recorder of deeds office (deed of trust) or with the circuit court (mechanic’s lien).
However, just because a deed of trust is filed before a mechanic’s lien is filed does not mean that the deed of trust has priority over the lien.
One reason the deed of trust may be junior to the mechanic’s lien is due to a doctrine in construction law called the first spade rule.
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What is the First Spade Rule?
“All mechanics’ liens commence at the date of the first stroke of the axe or spade, and continue in the erection of [a structure] without regard to the time of their being filed, or of the doing of the work or furnishing the materials.” Grau Contracting, Inc. v. Captiva Lake Invs., LLC (Mo App. 2014)(quoting Schroeter Bros. Hardware Co. v. Croatian “Sokol” Gymnastic Ass’n, 58 S.W.2d 995, 1003 (Mo. 1932)).
This benefit to contractors comes from the powers granted in section 429.060 of the Missouri Revised Statutes and states the following, in relevant part:
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.
http://www.moga.mo.gov/mostatutes/stathtml/42900000601.html
This statute gives a mechanic’s lien priority over other encumbrances that attach after the work has begun.
However, there is a distinction between whether deeds of trust or mechanics’ liens have priority over the land and/or building. There is another statute that governs deeds on the building, structure, or improvements.
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Is there a difference in priority if the mechanic’s lien attaches to the structure instead of the land?
Yes. A different statute governs priority with respect to the structure.
Under section 429.050 of the Missouri Revised Statutes, a mechanic’s lien claimant has better protection when the encumbrance relates to the building or structure:
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; and any person enforcing such lien may have such buildings, erections or improvements sold under execution, and the purchaser may remove the same within a reasonable time thereafter; provided, that nothing contained in this section shall be so construed as to allow any such sidewalk as is mentioned in sections
429.010 to
429.340 to be so sold under execution or so removed.
http://www.moga.mo.gov/mostatutes/stathtml/42900000501.html
This statute basically says that a mechanic’s lien on a building, structure, or improvements takes priority over any other encumbrance.
That’s a big distinction from the priority a mechanic’s lien has on land (which is only on third party encumbrances that were filed after the construction work started).
For purposes of lien priority, does it matter if I have a purchase money mortgage or just an ordinary mortgage?
Generally it does not (there’s an exception discussed below). When determining priority between liens and mortgages (deeds of trust), whether it be a purchase money mortgage or otherwise, typically all mortgages are treated the same.
Missouri mechanic’s lien statutes (specifically sections 429.050 & .060) govern the priority of a mechanic’s lien while the recording statutes govern the priority of a purchase money mortgage.
However, as noted regarding the building, structure, or improvements, the mechanic’s lien takes priority regardless of the type of mortgage.
Similarly, regardless of the type of mortgage/deed of trust, whether the work begins first or whether the mortgage is filed first determines which encumbrance takes precedence as to the land.
Below is an exception where the purchase money mortgage actually would take precedence on the real estate.
What is the Common Legal Learning Exception with respect to Lien and Mortgage Priority ?
In rare circumstances, a purchase money mortgage may take priority over the mechanic’s lien based on the common legal learning exception. This is basically a concept set forth in section 7.2(b) of the Restatement (Third) of Property (Mortgages) and states the following:
A purchase money mortgage, whether or not recorded, has priority over any mortgage, lien, or other claim that attaches to the real estate but is created by or arises against the purchaser-mortgagor prior to the purchaser-mortgagor’s acquisition of title to the real estate.
The policy behind this is to protect the purchase-money mortgage from liens or claims that existed on the property prior to the closing and that would attach at the same time as the purchase-money mortgage.
One common situation where this might happen is if the contractor begins work on the property before the closing.
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Other Missouri Liens
What other liens are there besides Mechanic’s Liens?
As you may be aware, contractors, subcontractors, suppliers, and laborers have the ability to file a mechanic’s lien, which is set forth in section 429.010 of the Missouri Revised Statutes. Chapter 429, however, does not only define mechanic’s liens but includes numerous other types of liens that may be filed by participants on a construction project in Missouri.
There is also something called a design professionals lien, which encompasses liens by architects, engineers, landscape architects, and surveyors.
Persons that perform work on railroads such as contractors, subcontractors, fuel and material suppliers, and/or laborers have lien rights on the property that is owned by the railroad company, but the requirements to perfect these liens are much more stringent than a mechanic’s lien.
One example of the stricter requirements lies in the amount of time the entity has to file the lien. Instead of having 6 months to file the lien (amount of time a contractor, subcontractor, or supplier has to file a mechanic’s lien in Missouri), the contractor, subcontractor, or supplier has 90 days.
In addition, commercial real estate brokers who sell commercial real estate may be able to file a lien on the property that was sold.
There are also certain types of liens called equitable liens, but these types of liens have an element that requires that no other remedy be available for the person or entity asserting the lien.
Because Chapter 429 sets forth numerous types of liens and remedies for contractors, subcontractors, suppliers, and laborers, rarely, will you see an equitable lien in the context of a construction project.
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Can Laborers individually file a lien for unpaid wages?
Yes. Section 429.010 grants lien rights to laborers who have unpaid wages on a construction project. Pursuant to the statutes, laborers that have direct interaction with the owner are supposed to provide 429 notice that general contractors are required to provide for mechanic’s liens.
However, laborers may receive more lenient treatment when attempting to file liens. For example, in the BCI Corp. v. Charlebois Constr. Co., the Missouri Supreme Court reviewed the case on appeal and held that the laborer did not have to provide the 429 notice required of general contractors, nor did the laborer have to provide the 10 day notice of intent to file a mechanic’s lien, which is required of subcontractors. See BCI Corp. v. Charlebois Constr. Co., 673 S.W.2d 774 (Mo. Banc 1984).
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Mechanic’s Lien Law Attorney
If you need further information regarding the filing or defense of mechanic’s liens, please contact one of our mechanic’s lien law attorneys today.
