Attorney Reviews Changes to Lien Law for HBA Members

Attorney Steven J. Blair reviewed changes to Missouri’s mechanic’s lien law at a presentation for the HBA’s members last week. Several important aspects of the law highlighted by Blair included:

– The new section of the statute applies to any conveyance of property closing on or after November 1, 2010. This means it applies now, even if the Notice of Intent to Sell (NIS) states a date prior to November 1 as the intended date of sale because the sale may actually close later than expected.
-The new section of the law only applies to mechanics’ liens asserted against residential real property, but not to mechanics’ liens for repair, remodeling or addition to owner occupied residential real property, which is still governed by 429.013 (reference number referring to the original section of the mechanic’s lien statute.)
-There are two significant new requirements of this law: 1) REQUIREMENT TO FILE A NOTICE OF RIGHTS; and 2) REQUIREMENT TO FILE A NOTICE OF INTENDED SALE.
New Requirement – Notice of Intended Sale (NIS)

If the record title owner of residential real property has contracted with a Claimant for the performance or provision of work, labor or materials for the improvement of such property, in order to facilitate the owner’s sale of such property to a bona fide purchaser for value, then the owner or the owner’s designated agent must record an NIS in the office of the Recorder of Deeds in the county in which the property is located.

NIS must be recorded not less than 45 calendar days prior to the earliest calendar date the owner “intends” to close on the sale of such property to such purchaser, and the anticipated date of closing must be stated in the Notice.
Only one NIS shall be recorded, even if the intended date of closing is postponed to a later date.
Recording of NIS is a condition precedent to a claimant’s obligation to record a NOR.

-NIS must be posted by the owner or owner’s designated agent.
-Can be posted on the subject property, at the entrance to the subject property, or at any job site office located at or near the subject property.
-Owner or designated agent must provide any claimant with a copy of the NIS (and a copy of the legal description of the subject property) within five calendar days after the date the owner or its designated agent receives a written request for the same from any such claimant.
-Owner or agent’s failure to post or mail or transmit the information, however, does not relieve the claimant of its claimant’s obligation to record a NOR.
-If the owner fails to provide the legal description of the property, then the claimant can claim as its sole and exclusive remedy the claimant’s actual and reasonable costs, excluding attorney’s fees, to obtain a legal description of the subject property necessary for the claimant to record its NOR, and those costs are considered lienable as well.

New Requirement – Recording of “Notice of Rights” (NOR)
“Claimants” who seek to retain the right to assert a mechanic’s lien against residential real property are required to “record” an NOR in the office of the Recorder of Deeds for the county in which the property is located not less than five calendar days prior to the intended date of closing stated in a “Notice of Intended Sale.”

If a claimant files an NOR and the intended sale does not occur, the claimant is not required to subsequently record an additional Notice of Rights.

There appears to be no requirement that a claimant wait until a property owner records a Notice of Intended Sale (NIS) in order to record an NOR. Failing to record an NOR is deemed a waiver and forfeiture by the claimant to assert a mechanic’s lien if it does not occur within the five day time limit.

What the NOR must include:
-Date: Date of the document.
-Owner: Identify property owner, as “Grantor”, by correct name.
-Claimant: Identify claimant, as “Grantee”, by correct name, current address, contact persons, and current telephone number.
-Property: Legal description of the property. (That means the actual legal description of the property, not just the physical address, etc.)
-Person contracting with Claimant for work: Identify person or entity contracting with claimant by correct name, current address and current telephone number.
-Persons performing work for or supplying materials to Claimant: Claimant may, but is not obligated to, identify any persons or entities which have or will be performing work or supplying materials on behalf of Claimant for the property. Said entities or persons must be identified by correct legal name, current address and current telephone number. (For a sample format of the NOR, click here.)

Additional requirements:
-NOR must be signed by a person authorized to execute the form on behalf of Claimant.
signature must be notarized.
-Name of the person signing the form must be printed legibly or typed immediately below the signature.
-Grantor’s signature is not required.
-No requirement that the claimant (“Grantee”) identify the amount of the lien.

It is important to remember that the NOR is NOT a mechanic’s lien; and recording a NOR does not extend the time for filing a mechanic’s lien! Compliance with the new section of the statute, (§ 429.016) does not relieve a claimant of its duty to comply with all other applicable sections of the mechanic’s lien statute in order to preserve, assert and enforce its mechanic’s lien rights.

For specific advice on how this new law applies in particular circumstances facing you, please consult with your attorney. If you have questions regarding the presentation or wish to contact Blair, please call or email HBA Public Affairs Director Jennifer McClure at 838-1456 or jennifer@springfieldhba.com.
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