Essential things to know about Montana mechanics liens
Contractors & suppliers have strong lien rights in Montana. If a contractor or supplier isn’t paid on a construction project in Montana, they can file a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed.
Eligibility 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 lienable 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
Montana generally requires preliminary notice, but there are exceptions. In Montana, they call this preliminary notice a “Notice of Right to Claim a Lien.” Contractors who have a direct contractual relationship with the property owner are not required to send a Notice of Right to Claim a Lien. This preliminary notice is 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. 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.
Deadline to file
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.
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.