Missouri’s New Lien Law Affects Real Estate Investors…Not Just Contractors

Mechanic Liens and Real Estate InvestorsWe’ve previously posted about the recent changes to Missouri’s mechanic lien laws (check out the Missouri tag here).   There are a lot of great resources on this blog, and elsewhere, about the law changes and how it affects contractors.  Not so much, however, has been written about how it may affect real estate investors.

As such, it was nice to see a post this last week from the Mid-America Association of Real Estate Investors, who focused on how the new law may affect this group:

The construction trades state that the statute is a nightmare for the construction industry, and it will probably be no walk in the park for the Property Owner either…

The new mechanic’s lien legislation in Missouri will make it much harder for everyone, the subcontractor, the material supplier, and the property owner. It went into effect on August 28 and will come into play on real estate closings that happen on or after November 1st.

One of the problems cited by the blog post is something that is a problem with all of these laws:   they create redundancy and confusion.

Last week, in response to our blog post “Great Summary of Missouri Lien Law Changes from MoLien.com,” someone named Kim, a real estate investor, commented that the new requirements “seems really cumbersome and unfair to everyone.”

She makes an excellent point.   And really, it’s not only a good point with regard to the Missouri law, but with every one of these complex lien and notice requirements.    They are just plain confusing.   Here is part of my response to her comment:

Unfortunately, the laws that are passed every day by all these legislatures across the country completely miss their intentions. The laws are intended to protect folks…but, at the end of the day, no one knows that the laws or there, and if they do know, the law is so complex and convoluted it’s rendered rather worthless.

Kim calls out for help in her comment, asking to connect with folks who may want to pressure the legislature to fix the new law.   It’s a cry for help also found on the Mid-America Association of Real Estate Investor’s website:

And maybe we as Investors could band together in an Association and hook up with the Associations for Contractors and approach law makers to get the rules changed? It’s a thought.

It is a thought….


  • http://www.MAREInet.com Kim, the Real Estate Investor Association Director

    Thanks for the reply. I am actually the Director of MAREI – the association you mentioned. We have been in contact with several of our title companies to find out what our members need to do to work with in the new law so they don’t have closings held up because of the new law, yet none have responded – personally I don’t think they knew the law was coming. We want to get solid info on this law out to our members, but have yet to find much about it other than on your blog and several others in the construction industry. So who was behind this new rule in the first place?

  • http://www.expresslien.com Scott Wolfe Jr

    Kim, I’m not sure who was behind the new rule….just reporting on it 🙂

  • http://styronblog.com Harry Styron

    I’m not sure which title companies that Kim has been talking to, but the Missouri Land Title Association and several underwriters were involved in pushing the bill.

    Title insurers have been hit hard by claims on residential construction, to the point where insuring over construction liens was becoming impossible.

    The new law, which applies to residential construction, places a much greater and difficult burden on contractors.