Contractors & suppliers have strong lien rights in Montana. If a contractor or supplier isn’t paid on an Montana job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed. Here are 5 essential things you need to know about Montana’s mechanics lien law.
1) Many Parties Are Eligible to File a Mechanics Lien
In Montana, any project participant that has provided service or materials pursuant to a real estate improvement contract can file a mechanics lien. It is unclear, however, if suppliers to any party more remote than a first-tier subcontractor are protected. The following is all considered to be lien-able work: excavation or fill work, construction or installation on, above, or below the surface of the land, demolition, repair, remodeling, or removal of the structure, landscape operations, surface or subsurface testing, preparation of plans or surveys and drawings.
2) Preliminary Notice Not Always Required, But is Always Advisable
Preliminary notice is generally required in Montana, but there are exceptions. Contractors who have a direct contractual relationship with the property owner are not required to send preliminary notice. Preliminary notices are also not required on projects involving a 5+ unit residence or projects that are wholly or partially commercial in character. Notwithstanding the foregoing, however, it may be advisable to send preliminary notice anyway, just to be safe as there is little jurisprudence providing guidance on these issues.
If a project participant is sending preliminary notice, it must be served on the property owner not later than 20 or 45 days after first furnishing of labor or materials to the project, depending on the project type. The 20-day period generally applies as a baseline, but if the project is not an owner-occupied residence, and payment is to be made by a lender with a security interest in the property, the 45-day deadline applies. After the notice is sent, it must be filed with the county’s clerk and recorder within 5 days.
3) Montana Has a 90-Day Deadline to File a Mechanics Lien
In Montana, all project participants have a 90-day deadline to file. The 90 days begins on the last day that the project participant has provided services or materials for the project, or 90 days from the date that the owner filed a Notice of Completion.
4) Montana Mechanics Liens are Not Required to Be Notarized
Montana, among a handful of states, does not require a mechanics lien to be notarized.
5) Fees Can Not Be Included in the Mechanics Lien Amount
Unlike some states, Montana does not allow any additional fees, such as attorneys’ fees, interest, or consequential damages, to be included in the lien amount.
A Notice of Lien Rights is usually required in Montana