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Roofing & Siding Contractors Alliance

Latest Mechanic Lien Updates in Missouri Legislature

To: All RSCA Members

SUCCESS...!!!!

The Senate voted 32 - 0 to pass the Mechanic's Lien Reform H.B. 2058 late this afternoon. Additional language that was changed at the urging of NECCA (electricians) will be forth coming following a marathon meeting that lasted until 2 a.m. this morning. In summary, they (NECCA) changed the 60 day (time of) notification to almost the end of the construction time, the builder / contractor / owner must provide the legal description and name of the owner to the subcontractor and if NOT provided and a lien should be forthcoming, the subcontractor can recover all expenses, including legal fees, for recovery of the description and owners name. Some very major changes according to those trying to satisfy this addendum. However, it will be thrown back to the House for approval tomorrow, which is the last day of legislation. More to come as details are made available.

Respectfully submitted,

Jim Compton
Legislative Committee Member


TO: ALL RSCA MEMBERS

RE: Mechanic's Lien Reform - H.B. 2058

It appears that if there is any momentum to Mechanic's Lien Reform, the recent substitute to House Bill 2058 and proposed amendments have grabbed everyone's attention. The substitute H.B. 2058 is an effort by Rep. John Diehl (he introduced the original 2058) and Rep. Steve Hobbs (Chairman to the Insurance Committee who held first hearings) to introduce "fair and balanced" language satisfactory to both sides of this delicate issue.

In a brief summary, following the hearings and "Spring Break" the CEC (Construction Employees Coalition of which the RSCA is a member) has had several meetings including one with all of the "Stackholders" (MLTA, CEC, HBA, AGC, Missouri Bankers, Underwriters, Rep. Diehl, etc.) the lobbyist and Rep. Hobbs. Those occurred over the past 3 weeks. Following the extended weekend for Easter Break, the joint substitute bill has been offered as a solution on Tuesday. The recommended amendments (listed below) are the CEC's recommendations for clarification. They are hoping to bring it out of committee today or tomorrow. Ultimately this is being offered as a "residential" mechanic lien reform. The commercial group (AGC) has been neutral as it is currently being offered. Since another title company has discontinued it's Mechanic's Lien coverage (that now makes a total of 7) there are only 3 left. Because the HBA believes that commerce could come to a screeching halt if the remaining 3 pull out, the legislators feel like they need to pass something to address the comfort zone of what's needed. Please review Dick Stockenberg's amendments to the substitute. Since this will happen very quickly or not at all, I am trying to keep everyone up to date to the best of my ability. Communications is continuing on the hour as I type this so if you see something that you have a question on please contact me at your earliest convenience.

Respectfully submitted,

Jim Compton
RSCA Legislative Representative


ALL

Per our conference call here are amendments to 2058. There are six. They fall into different categories. There are three where I am proposing new language as substitutes for Diehl's language. There are two where I am suggesting deletions be made and there is one where I am suggesting their language be restored:

Subsection 2 deals with the definition or "residential real property". I have simplified the definition and deleted the expansive definition.

Subsection 3 deals with the lien claimants' Notice of Rights. I have provided for the recordation of the Notice with 45 days of the first day of work but the notice may be filed later than 45 days upon a showing there was no prejudice to the owner/title company by the late filing. In other words, it the property has not be sold and money changed hands, the notice is effective.

Subsection 7 eliminates lien rights if the notice is recorded after a sale. I am suggesting this be deleted.

Subsection 11 originally capped recording fees at $10. It was removed. I am proposing it be restored.

Subsection 12 says that the owner shall post a Notice at the job site disclosing the name of the owner and the legal description but there are no consequences if the notice is not posted or incorrect. I am proposing new language that would require the owner to record and post at the site as conditions precedent to the right to get the benefit of the new statute. Failure to record or post by the owner would relieve the sub/supplier from having to record a Notice of Rights to preserve lien rights.

Subsection 21 says lien rights not attach until the first Notice of Rights is recorded by a lien claimant. I am proposing this be deleted and existing law be allowed to remain as is.

I view all of this a minimal necessary changes. There could be many more suggestions, but these are crucial.

I invite/encourage others to proof read these documents.

Dick


SL01-4727638-v1-Amendment2058DefinitionResidential.pdf

SL01-4727639-v1-Amendment2058NoticeofRights.pdf

SL01-4727642-v1-Amendment2028BFP.pdf

SL01-4727643-v1-Amendment2058Feestorecord.pdf

SL01-4727644-v1-Amendment2058FailuretoRecordPost.pdf

SL01-4727649-v1-Amendment2058Priority.pdf