Lien Law Changes Approved in Missouri and Effective August 2010

The St. Louis and Eastern Missouri Home Builders Association Blog alerted us to a change in the Missouri Mechanics Lien Law starting August 28, 2010.  The Missouri General Assembly passed House Bill 2058, which “establishes procedures for asserting a mechanic’s lien against certain residential real property.” (Read Bill Summary) (Read Full Text).

What has changed?

Most of the changes affect a claimant’s lien rights on residential property that is being sold.  Presumably, the state legislatures were concerned about innocent purchasers of residential property getting stuck with mechanics liens that weren’t filed at the time of closing, or were filed too near the closing date to get picked up in the title search.   To address this issue, they added the following procedure:

Step 1:   The property owner intended to sell the residential property is to file (and post at the job site) a Notice of Intended Sale, which identifies the closing date for the residential property.

Step 2:   All claimants (subs, contractors, suppliers) who have lien rights must file a “Notice of Rights” at least 5 days before the posted sale date.

Claimants must keep in mind two tricky features of the new rule:  (1)  If the closing date changes, it doesn’t affect when the Notice is due – it’s still due at least 5 days before the posted closing date; and (2) This does not effect the claimant’s lien deadline, before or after filing the Notice of Rights (depending on timing), the lien is still due and must still be separately filed.

The new bill makes other changes as well, which we may post about in the future.   This law goes into effect on August 28, 2010, if it is signed by the governor.  Zlien’s forms and deadline database has already been updated to accommodate these law changes.

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