Mechanics Liens on Commercial & Residential Property
A mechanics lien is a way “mechanics” — defined liberally as construction companies, subcontractors, suppliers, architects, etc. — are able to obtain payment for service provided to a given piece of real estate. If the owner of the real estate owner does not compensate the mechanic for the service, then a lien may be taken out on the property, forcing the owner to either pay for the amount of the lien or face foreclosure.
The law is often described by Missouri Courts as being remedial in nature in that it provides contractors with an alternate way to collect funds which are owed to them. Although the law is construed as favoring contractors, strict compliance with the statute is necessary. For instance, a mechanics lien must be effectuated within six (6) months after the “indebtedness shall have accrued.” Case precedent has interpreted this to mean the last date that work or services were provided to the property.
Although the process may seem relatively straightforward, different rules and regulations apply to general contractors and sub-contractors. For instance, a sub-contractor must give extra notice before properly effectuating a lien. If this isn’t accomplished, then the lien is invalid. An invalid lien, in turn, can result in civil liability for defamation of title. Furthermore, in some circumstances, lien fraud can lead to criminal liability.
Because of the precision that needs to be exercised, you will undoubtedly need an attorney to comply with all of the statutory requirements if you wish to create a mechanics lien. If, on the other hand, your property is hit with a mechanics lien, then it would be wise to have an attorney research the situation and make sure that the debt is proper (e.g., it arises out of a valid contract) and that the lien was exercised correctly.
Based on the amount of money that is often involved with mechanics liens, the nuanced requirements, and the amount of parties usually involved, do not hesitate to contact us today if you have a mechanics lien problem.