Can Subcontractor secure a lien on Client’s property?
The short answer is “no”. Under R.S.Mo. §429.013, a copy of which is attached:
“No person, other than an original contractor, who performs any work or labor…shall have a lien…on such building or structure for any work or labor performed or for any material [etc.]…unless the owner of the building…pursuant to a written contract has agreed to be liable for such costs…”
The statute goes on to say that the contract must be separate from the contract between the Client and Contractor. In addition, the contract must contain bold, capitalized text with the following language:
“CONSENT IS HEREBY GIVEN FOR THE FILING OF MECHANIC’S LIENS BY ANY PERSON WHO SUPPLIES MATERIALS OR SERVICES FOR THE WORK DESCRIBED IN THIS CONTRACT ON THE PROPERTY ON WHICH IT IS LOCATED IF HE IS NOT PAID.”
The statute is very clear in that unless there is a contract containing the above language, signed by the owner, the subcontractor is expressly prohibited for securing a lien on the owner’s property.
Unless one of the exceptions applies (property is not owner-occupied, property is non-residential, property contains more than four units, or property is being originally constructed as opposed to renovated), a subcontractor may not secure a lien on the owner’s property.
What steps should Client follow if Subcontractor threatens to file or secure a lien?
At least ten days prior to filing a lien Subcontractor must provide written notice to Client of Subcontractor’s intent to file a lien. The notice is invalid unless personally served.
If Client receives such a notice, Client should, within ten days, file a “Notice of Invalid Lien” with the county’s filing officer. This form should contain Client’s sworn signature, names and addresses of Client and Subcontractor, and a reference to, or copy of, any document or documents believed to constitute the invalid lien.
What steps should Client follow if Subcontractor does in fact attempt to secure a lien?
If the ten-day period elapses and Subcontractor proceeds to file a lien, Client may file a legal action in Circuit Court. The cause of action is referred to as a “Petition to Declare Lien Invalid”. Client may recover his or her actual damages, or $5,000, whichever is greater. In addition, Client may recover from Subcontractor costs and reasonable attorney’s fees.
Client may also recover from Contractor if Subcontractor becomes insolvent and Contractor has not paid Subcontractor.