Filing a mechanics lien is your best defense against delinquent clients. When you file a mechanics lien, you are able to limit a property’s market value by tainting its public records with a note regarding your outstanding payment claim. This mechanics lien record is very effective in encouraging property owners to step up and settle the debt.
In Missouri, filing a valid mechanics lien is a long process that requires multiple steps, from protecting your lien rights to preparing your mechanics lien form to having it recorded in the local county clerk’s office. Failing to follow the statutory lien rules regarding these steps can be fatal to your lien claim.
This guide will tell you everything you need to know about filing a mechanics lien in Missouri, from the specific requirements all the way to the best practices that you might want to keep in mind.
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- Who can file a mechanics lien in Missouri?
- Pre-lien notices in Missouri
- What happens if you fail to serve or file these pre-lien notices?
- How to file a mechanics lien in Missouri
- Important deadlines to remember when filing a Missouri mechanics lien
- Best practices when filing a Missouri mechanics lien
Who can file a mechanics lien in Missouri?
Almost all construction parties have a right to file a mechanics lien in Missouri. General contractors, subcontractors, and material suppliers have lien rights, as well as equipment lessors and landscapers.
An exception applies to parties working on residential projects with 1 to 4 units. In this type of project, only parties with a direct contractual relationship with a property owner have the right to file a mechanics lien.
Pre-lien notices in Missouri
As with most states, there are certain notices that a construction party in Missouri must serve in order to protect their lien rights.
Notice to Owner
The Missouri Notice to Owner – also known as disclosure notice – is required for all general contractors working in any construction project. This notice must be served prior to receiving the first payment from a property owner.
The Notice of Owner must be written in 10-point bold type and must contain the following disclosure language:
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.
Notice of Intent to Lien
The Notice of Intent to Lien is required for all subcontractors and material suppliers who have no direct contract with the property owner. This notice is served on a property owner after a payment issue has already arisen and its purpose is to inform a property owner of your plan to record a mechanics lien on their property.
The Notice of Intent to Lien must be served at least 10 days before an official mechanics lien is filed. Unlike in most states, the Notice of Intent to Lien is Missouri must be served by an officer authorized by law to serve a process in civil actions or by a competent witness. The officer’s official return will be considered the official proof of serving the notice. If served by another witness, the witness must sign an affidavit to verify that the Notice of Intent to Lien has been served.
Missouri state laws do not have a prescribed form on how to write the Notice of Intent to Lien. However, it must specifically state that you have an outstanding claim against the property and it must also include the amount you are claiming as well as the name of the party who owes you the payment.
Notice of Lien Rights
The Notice of Lien Rights is a pre-lien notice in Missouri that is only required under specific circumstances. If a property owner files a Notice of Intended Sale for a residential property, the construction party working on the property must file a Notice of Rights to protect their lien rights.
The Notice of Rights must be filed in the office of the recorder where the property is located. It must be recorded not less than five days before the intended date of closing stated on the Notice of Intended Sale.
The Notice of Rights must have the following information:
- The date the document is filed
- The name of the property owner
- Your name, address, and telephone number
- A legal description of the property
- The name, address, and telephone number of the party you are contracting with
- The name, address, and telephone number of the parties who work under you, if applicable
Note that the Notice of Rights must be notarized before you may file it in the office of the recorder.
What happens if you fail to serve or file these pre-lien notices?
Missouri takes mechanics lien deadlines very seriously. If you fail to properly serve or file your pre-lien notices, you will lose your mechanics lien rights. This means that you may not recover payment from delinquent clients by enforcing a mechanics lien.
How to file a mechanics lien in Missouri
1. Prepare your Missouri mechanics lien form
The mechanics lien in Missouri must contain the following details:
- Your name
- A “just and true account” of the demand
- A true description of the property that should be sufficient for identification
- The name of the property owner
- The name of the general contractor, if applicable
What qualifies as a “just and true account” in Missouri?
Note that meeting the “just and true account” requirement is rather tricky. The previous ruling stated that general contractors can satisfy this requirement by providing a lump sum (i.e. the total amount that they are claiming) while parties who do not have a direct contract with a property owner – including subcontractors and material suppliers – must provide an itemized breakdown of the labor and materials furnished.
In either case, the amount being claimed must be true and just. Lien-related fees such as attorney costs, as well as payments that have already been settled, must not be included in your just and true account.
For parties working on a residential construction project, you are required to append your mechanics lien claim with the following information and documents in order to satisfy the “just and true account” requirement:
- A photocopy of the file-stamped notice of rights and any renewals of notice of rights recorded;
- The name and address of the person or entity which the claimant contracted with to perform work on the property;
- A copy of any contract or contracts, purchase order or orders, or proposal or proposals, and any agreed-upon change orders or modifications to such agreements;
- In the absence of any written agreement or agreements, a general description of the scope of work agreed upon to be performed by the claimant on the property and the basis for payment for such work as agreed to by the claimant and the contracting party;
- All invoices submitted by the claimant for its work on the property;
- An accurate statement of account which shows all payments or credits against amounts otherwise due to the claimant for the work performed on the property and the calculation or basis for the amount claimed by the claimant in the mechanics lien statement;
- The last date the claimant performed any work or labor upon, or provided any materials or equipment to, the property;
- A file-stamped copy of his or her Notice of Rights, if applicable
Must a Missouri mechanics lien be notarized?
Yes, you must have your mechanics lien verified by an authorized notary officer in order for your claim to be enforceable.
2. Record the Missouri mechanics lien
Once you have properly prepared your mechanics lien form, you have to record it in the recorder’s office of the county where the property is located. You must record your mechanics lien within 6 months of your last day of work.
You may record the lien by visiting the recorder’s office or by certified mail. Note that if you decide to mail your mechanics lien, make sure that it contains the correct amount of filing fees. Phone the recorder’s office to know the exact amount that your mechanics lien must contain.
Note that Missouri does not require its mechanics lien claimants to serve a copy of the recorded mechanics lien on the property owner or the general contractor. However, you are still encouraged to serve a copy of the lien as doing this extra step may be enough to encourage them to settle the outstanding payment.
3. Enforce/release the mechanics lien
After recording your mechanics lien, two things may happen: either you get paid or you don’t. Note that a mechanics lien is only effective for 6 months after the recordation date. Your next step will depend on whether you receive the payment or not.
If the mechanics lien has been satisfied and you have duly received your payment, you are required to effectively cancel the lien by filing an acknowledgment of satisfaction in the same recorder’s office where the mechanics lien was recorded. This acknowledgment must be filed within 10 days of receiving payment.
Note that refusing to release the lien within the 10-day time frame can hold you liable for the attorney fees and other costs incurred by the property owner.
If the mechanics lien has not been effective in getting you paid, you must enforce the lien by initiating a foreclosure lawsuit against the property owners. Winning this lawsuit can get you paid through the proceeds of the possible foreclosure sale of the property.
Keep in mind, however, that you must file this notice within 6 months after you recorded the mechanics lien. If you do not initiate foreclosure within the 6-month period, the mechanics lien will expire and it will no longer hold a claim against the property.
Before initiating the foreclosure lawsuit, you may first serve a Notice of Intent to Foreclose on the property owner. This notice is not a requirement, but notifying the property owner that you intend to file a case against them might be enough to encourage them to pay up.
Important deadlines to remember when filing a Missouri mechanics lien
Best practices when filing a Missouri mechanics lien
1. Serve the pre-lien notices on time
Serving the required pre-lien notices on time is very important in Missouri. If you miss the deadline by even just a day, your mechanics lien rights will automatically be revoked. It is, therefore, best practice to prepare your pre-lien notices way ahead of the deadline so you will have enough time to check and verify its contents.
Make sure that the required statements and information are included, and that all the details are written correctly. Minor mistakes like spelling and formatting errors may cost you your lien rights so make sure to double-check your notices before you send them out.
2. Serve a copy of the mechanics lien on the property owners
Serving a copy of the mechanics lien on the property owners is not required in Missouri. However, it is always a good idea to notify the owners that a mechanics lien has just been recorded on their property.
By letting the property owners and the general contractors (if applicable) know that a mechanics lien has been filed, you are giving them the chance to respond as quickly as possible. This also increases your chance of getting paid sooner rather than later.
3. Ensure that correctness and accuracy of your mechanics lien
Having a “just and true account” on your mechanics lien is very important. You must, therefore, make sure that all the bits of information included in your mechanics lien in Missouri are accurate, especially the amount that you are demanding to be paid.
Missouri takes cases of mechanics lien fraud seriously. If you are not able to justify the lien amount, your mechanics lien may be declared null and void. You may also be subjected to penalties and fines if the court determines that you have willfully filed a fraudulent mechanics lien, so make sure that your mechanics lien claim is accurate and reasonable.