2010 Revisions to Missouri\'s Mechanics Lien Law

1. Leonard R. Ruzicka, Jr. Ellen C. Nangle Stinson Morrison Hecker LLP April 28, 2011 www.stinson.com 2010 Revisions to Missouri’s Mechanics Lien Law © 2011, Stinson Morrison Hecker LLP

3. Rules regarding the effectiveness of lien waivers

4. Information required in a lien statement

5. Procedure for removing lienswww.stinson.com © 2011, Stinson Morrison Hecker LLP

6. Application of New Statute [R.S. Mo. §429.016(11)] Statute applies to construction of new residential property, which includes: Residential property of 4 units or less Condos, townhouses and co-ops, regardless of the number of units The residential portion of a mixed use or planned development BUT, only if residential units are on separate, identifiable parcels of land www.stinson.com © 2011, Stinson Morrison Hecker LLP

7. Application of New Statute (cont’d.) Streets, sidewalks, utility services, improved common areas or other facilities within residential use developments and areas www.stinson.com © 2011, Stinson Morrison Hecker LLP

8. Exceptions to the New Statute Commercial construction Industrial construction Public works construction Construction of residences if intended for rental Repair, remodeling or additions to owner occupied residential property of four units or less www.stinson.com © 2011, Stinson Morrison Hecker LLP

9. Methods by which a mechanics lien can be extinguished by a property owner New law has procedure for recording and posting a notice of intended sale If procedure is followed, an otherwise valid lien will be extinguished unless lien claimant timely files a Notice of Rights www.stinson.com © 2011, Stinson Morrison Hecker LLP

10. Notice of Rights Must be notarized and recorded at least 5 days before the date stated in the Notice of Intended Sale as earliest date of closing Lien claimant, in order to protect its lien, must track all recordings on property or regularly visit the property. A claimant that is accurately identified in a previously recorded notice of rights affecting the property has no duty to record another notice of rights. www.stinson.com © 2011, Stinson Morrison Hecker LLP

11. Effectiveness of Lien Waivers Execution of a lien waiver does not waive a claimant’s right of the full amount unless certain language is present www.stinson.com © 2011, Stinson Morrison Hecker LLP

12. Language in Lien Waiver “UNCONDITIONAL FINAL LIEN WAIVER FOR RESIDENTIAL REAL PROPERTY Claimant (provide legal name and address of Claimant) hereby fully, finally and unconditionally waives and releases any right to assert or enforce a mechanic’s lien claim against the residential real property identified below for all work performed by Claimant prior to the date set forth below and for any work hereafter performed by or on behalf of Claimant under any agreements executed by Claimant prior to said date set forth below: (Provide legal description of Property).” www.stinson.com © 2011, Stinson Morrison Hecker LLP

13. Language in Lien Waiver (cont’d.) In addition, the statute requires that the claimant’s legal name and the name, title or position, address, and telephone number of the person executing the unconditional final lien waiver on behalf of claimant must be typed or legibly printed immediately above or below the signature, and the date that the document was signed must be typed or legibly printed immediately adjacent to the signature. www.stinson.com © 2011, Stinson Morrison Hecker LLP

14. Information Required in a Lien Statement New statute has clear guidelines about what needs to be included with a mechanics lien filing Corrects uncertainty in the past about what information is required to be filed with the mechanics lien www.stinson.com © 2011, Stinson Morrison Hecker LLP

15. Required Information Photocopy of the file-stamped notice of rights, and any renewals recorded by claimant Name and address of person or entity which claimant contracted with to perform the work Any contract(s), purchase order(s) or proposal(s) and change orders under which claimant performed work www.stinson.com © 2011, Stinson Morrison Hecker LLP

16. Required Information (cont’d.) If no written agreement, a general description of the scope of work to be performed by a claimant and the basis for payment of such work All invoices submitted by claimant for work A statement of account showing all payments or credits against amounts otherwise due for work www.stinson.com © 2011, Stinson Morrison Hecker LLP

17. Required Information (cont’d.) The last date claimant performed work or provided labor A file-stamped copy of the Notice of Rights to claimant’s mechanics lien statement www.stinson.com © 2011, Stinson Morrison Hecker LLP

18. Procedure for Removing Liens Providing substitute collateral Missouri is one of the only states that does not have a “bonding over” statute www.stinson.com © 2011, Stinson Morrison Hecker LLP

19. Procedure for Removing Liens (cont’d.) New law provides procedure for removing lien from the property by either depositing with the court cash, a letter of credit or a surety bond of at least 150% of the amount owed by claimant www.stinson.com © 2011, Stinson Morrison Hecker LLP

20. Questions www.stinson.com © 2011, Stinson Morrison Hecker LLP