If you’re working on a Montana construction project and haven’t been paid, then filing a mechanics lien might be just what you need. Almost everyone involved in a construction project in Montana has mechanics lien rights to protect their payments. A mechanics lien is one of the most powerful tools in a contractor or supplier’s belt to ensure they get what they earn.
This how-to guide is meant to provide you with everything you need to know about filing a mechanics lien in the state of Montana.
Note: Montana also refers to a mechanics lien as a “construction lien.” We use both terms below, but don’t get confused; they’re the same thing.
Before you file: Make sure you have mechanics lien rights
In the state of Montana, mechanics lien rights are granted to any person who furnishes services or materials pursuant to a real estate improvement contract may claim a construction lien. This is a pretty broad statement that includes most project participants. And, don’t let the word “contract” fool you. The contract can either be express or implied. Furthermore, the contract doesn’t even need to be in writing to be able to file.
Montana preliminary notice requirements
In order to file a mechanics lien, be sure that you followed Montana preliminary notice requirements:
- If you are a general contractor or wage earner (or hired directly by the property owner), preliminary notice (or Notice of Right to Claim Lien).
- If you are a subcontractor, supplier, or other (not hired directly by the owner), you must send preliminary notice to the owner within 20 days of first delivering materials or labor. You need to file the notice with the county recorder within 5 days of sending it to the owner.
- If the property is not owner-occupied, and payments are made by a lender with a security interest or encumbrance on the property, you must send preliminary notice within 45 days.
Regardless: If you make it a habit to send preliminary notice within 20 days on every project in Montana, you’ll be protected.
Now that we’ve established who can file a mechanics lien in Montana, let’s get to the nitty-gritty.
Step 1: Prepare the proper mechanics lien form
First and foremost, if you want to file a mechanics lien in Montana, you need to have the right document. Not only does the lien claim need to be in the proper format, but it also needs to include all the necessary information on it. There’s nothing particularly unique about the form itself, but if you don’t use the proper form, your claim could be rejected right off the bat!
Properly identify yourself
This seems simple. But you’d be surprised how often people misidentify themselves. Liens can and have been challenged for less. You’ll need to provide your full name, address, and contact information. Also, if you are filing on behalf of a company, make sure that you use the company’s full, legal name.
Identify the property owner(s)
Although mechanics liens are filed on the real property itself, the claim must properly identify the property owner as well. If there’s more than one owner, you should include all of them. Getting the property owner’s information can be challenging, particularly for lower-tiered project participants like sub-subcontractors.
For some guidance on how to get your hands on this information, see How to Find a Property Owner on a Construction Project.
Describe the labor or materials provided
In this section, you’ll need to provide a brief statement of the type of labor or materials that were provided on the project. This doesn’t need to be a complete, itemized list of everything done on the project. Just describe your work or materials enough to give a good sense of what you actually did on the project. But don’t be too vague. One of the more common reasons mechanics liens are rejected is because there wasn’t enough detail.
For some real-world examples of rejected and accepted descriptions, see How Much Detail Should I Include in Description of Labor & Materials?
Identify the hiring party
Here’s an easy one. This is the name and contact information of the person who hired you. Just look at your contract documents. They should have everything you’ll need to fill out this section. If you were hired by the property owner, just put their information down here again.
State the amount of the lien claim
Here’s where the amount of money that was unpaid on the project is provided. Well, what if there is no fixed amount in the contract? Then you can simply write in a good faith estimate of the amount, as long as you indicate that it’s an estimate. Be careful here, don’t overestimate the amount of include any additional amounts like attorney’s fees or interest. Claiming too much in this section could leave the claimant liable for filing a fraudulent mechanics lien.
Provide the first and last dates when labor or materials were provided
This next section is where you’ll input the dates that work or materials were provided to the construction project. The start date should be simple, but the last date isn’t always clear. So, if the last date on the project hasn’t happened yet, then you can simply provide an estimated date of completion.
Include a description of the property
This section requires “a description of the property sufficient to identify it.” This is a pretty vague requirement. A simple street address will likely not suffice, but a full legal property description isn’t required. Best bet? Go ahead and provide as much information you can about the property. There is no penalty for providing too much information, but you could be penalized for not providing enough detail.
Certify that the preliminary notice was served and filed
This doesn’t need to be a separate document. Rather, a simple statement along the lines of “I gave notice of the right to claim a lien as required by Montana Code §71-3-531 on [date] to [owner].” If, however, you fall under one of the exceptions to sending notice, you should state that you weren’t required to and why.
Sign & verify
Lastly, you’ll need to sign your mechanics lien. Montana is one of the few states that does not require you to notarize a mechanics lien. Instead, there’s a short paragraph stating that the information is true and accurate to the best of your knowledge. Right underneath that section is where you’ll put your John Hancock.
Note: Don’t worry if you can’t track down all of the required information. Under Montana mechanics lien law a property owner obligated to provide their information and a sufficient property description to the GC. If a sub or supplier sends a written request to the GC for that information, they are required to provide it within 5 days.
Step 2: Send the notice of the lien claim
Before you file a lien claim in Montana, you must serve a copy of the lien claim on every owner of the property. So when preparing your mechanics lien, be sure to make a copy to send out to the owner. You must make this lien notice either by personal service or certified mail with return receipt requested. There’s no specific period of time that this needs to be sent, as long as it’s done before filing the claim itself.
The lien claimant (that’s you!) must certify that the lien was served on the property owner, and how you delivered it. You must include this with the lien when filing. Along with the lien claim, include an “affidavit of mailing” that is signed and notarized, stating that you’ve sent a copy of the lien to all property owners.
Step 3: File your mechanics lien
Once a copy of the mechanics lien has been properly served on the owner(s), you’re ready to file your claim. This may seem like the easiest step, but a lot can go wrong when filing your claim. Some of the more common mistakes when filing a Montana construction lien include:
- Incorrect filing fees
- Filing in the wrong office
- Not taking county turnaround into account and filing late
- Missing the deadline because your initial claim was rejected
Deadline to file a mechanics lien
Timing is everything when it comes to construction liens. If a deadline is missed, your opportunity to file a claim is gone. The deadline to file a Montana mechanics lien is particularly unique, as the statute provides two different timelines. A claim must be filed within 90 days of the last day of furnishing labor or materials to the project, or 90 days from when the property owner filed a Notice of Completion.
Since there’s no distinction between the two, it’s important to closely monitor your deadlines. Here’s an interesting twist. Technically speaking, if the owner files a Notice of Completion after your last date of furnishing, then they actually extended the timeframe to file your claim. But, given the fact that missing the deadline destroys your lien rights, it’s best to count from the last date of furnishing. Just to be safe.
Where to file the mechanics lien
There are all sorts of county offices that file any number of documents. When going to file your lien, be sure you are in the right office and in the right county. A Montana mechanics lien needs to be filed with the county clerk and recorder’s office in the county where the property is located. Each office will have its own specific requirements and filing fees. It’s a good idea to contact the office ahead of time to ensure that you have everything you need.
How to deliver your mechanics lien
You basically have three different options regarding how to file your mechanics lien claim. Each has its own advantages and drawbacks. You can either file in person, file through the mail, or file electronically.
1. File in person
Delivering your lien in person is the best way to ensure that your lien is recorded on time. Yes, this involves going down to the actual office and waiting in line (or you can send a courier). But the biggest advantage is that you can counter any problems right there to avoid any rejections or mistakes. When heading down to the office, make sure you have all the documentation you need, along with at least one or two blank checks in case you miscalculate your filing fees.
2. File by mail
Filing by mail can be a somewhat risky proposition. Why? Because time is against you. There’s the time it takes to get to the office. Then there’s the office backlog which can’t guarantee that the lien is filed on the same day it’s received. And finally, if there’s something wrong, then the office has to return it for you to fix and resend. If you miss a requirement or send the wrong filing fees, this could put your back against the wall as far as the deadline is concerned.
If filing by mail, you’ll want to include a self-addressed, stamped envelope with return instruction if you want a copy of the recorded lien for your records.
3. File electronically
The last option to file a Montana mechanics lien is to file electronically. Not all county recorder offices in Montana accept e-recording, but a growing number do. The largest advantage here is sheer convenience. This will typically involve creating an account with the county website and uploading your documents. If you’ve decided to go this route, be careful. The uploaded forms will need to be not only legible but formatted correctly as well.
Step 4: Enforce or release your mechanics lien
If you’ve followed these steps, then congratulations! You have successfully filed a mechanics lien according to Montana law. Now that your claim is on the books, your mechanics lien can start working to get you paid.
But the story isn’t over yet.
A Montana mechanics lien is only valid for 2 years from the date of the filing. Within that timeframe, you’ll need to take some action before the lien expires.
Option 1: Enforce (foreclose) your mechanics lien
If the 2-year deadline is steadily approaching, and payment hasn’t been made, it might be time to consider filing a lien foreclosure action. Keep in mind that enforcing your mechanics lien is a full lawsuit. We highly recommend contacting a construction attorney to help guide you through this process. If you’re not quite ready for that, there’s one more thing you can do to try and induce payment.
You can send what’s known as a Notice of Intent to Foreclose. Consider this a final warning shot across the bow. It’s a simple letter sent to the property owner warning that if payment isn’t made within x amount of days that you’re ready to enforce your mechanics lien rights. This is typically enough to loosen the grip on your hard-earned money.
Option 2: Release (cancel) the mechanics lien
If you’ve eventually been paid, then you’ll likely be asked to file a lien release. If a release is at the owner’s request, you’ll need to release the claim within 5 business days. The process of filing a lien release is essentially the same as filing the lien itself. It’s a simple form that needs to reference the lien claim and filed in the same office the lien was filed in.
Montana Construction Lien Law & Payment Resources
- Montana’s full construction lien law: MCA § 71-3-521 et. seq.
- Montana Mechanics Lien Guide and FAQs
- Even more resources to get paid on Montana construction projects