Nuts & Bolts | Construction Law Blog

A recent Missouri Court of Appeals case illustrates the importance of contractors, subcontractors, and design professionals ensuring that the work they are performing is pursuant to an original contract, or that the work is captured by an additional agreement, such as an executed change order or supplemental agreement, to protect their mechanic’s lien rights.

Most construction professionals regularly file or dispute mechanic’s liens and feel fairly comfortable dealing with them. However, this experience is often concerning a single building constructed under a single contract. Professionals don’t regularly deal with contracts covering multiple buildings. Therefore, professionals often try to follow the same rules they use to file a single lien on multiple buildings constructed under one contract. Unfortunately, by following the same rules, they often inadvertently give up their lien rights on at least one building.

Subcontractors and suppliers performing work in Illinois do not have the right to file a mechanic’s lien on publicly owned property. Despite this, the “lien against public funds” provides a useful tool for subcontractors that have performed work on public projects in Illinois and have not been paid.

If you are a contractor, subcontractor or other entity offering construction goods and services, you probably know that the ability to place a lien on property for the unpaid value of labor and materials provided is a great piece of leverage. Conversely, if you are a property owner, you have likely had to take steps to avoid the title of your property becoming clouded by liens. This is typically required by most loan agreements.

An unpaid contractor’s best friend is often the mechanic’s lien statutes, which provide an avenue for the unpaid contractor to apply pressure to the owner or higher-tier contractor for payment. A mechanic’s lien will likely attract attention from the owner’s lenders and potentially motivate the owner to pay the contractor’s unpaid balance. Additionally, in Illinois, a mechanic’s lien can even allow the contractor to foreclose on the property if the lien is left unsatisfied.

Missouri law (R.S.Mo. 429.005.1, et seq.) grants general contractors, subcontractors, suppliers, and laborers the ability to assert a mechanic’s lien for labor and materials provided to a property, provided the lien is properly filed within six months of the last date of work (excluding warranty and corrective work).

A claimant’s ability to file a mechanic’s lien against an owner’s interest in leased property is often a complicated analysis. Missouri law provides that “any person who shall do or perform any work or labor upon land … for any building, erection, or improvements upon land … upon or by virtue of any contract with the owner or proprietor thereof, or his or her agent, trustee, contractor or subcontractor” shall have a lien upon the building, erection or improvements. R.S. Mo. § 429.010 (emphasis added).