Missouri HB 427 and Senate Bill 357 “modifying the law relating to mechanics’ liens for rental machinery and equipment” was signed into the law by the state’s governor on June 28, 2013, and is slated to take effect on August 28, 2013. The changes are not substantial because parties in Missouri will have the same underlying rights, but it does make it a lot easier for potential claimants to preserve those rights.
Examining the Textual Changes To The Missouri Mechanics Lien Law
The statute amended by the recent Missouri legislation is §429.010 R.S.Mo. The amendments are as follows:
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1….For claims involving the rental of machinery or equipment
to others who use the rental machinery or equipmentthe lien shall be for the reasonable rental value of the machinery or equipment…
2(3): The party claiming the lien provides written notice within
fivefifteen business days of the commencement of the use of the rental machinery or equipment to the property owner that rental machinery or equipment is being used upon their property. Such notice shall identify the name of the entity that rented the machinery or equipment ,and the machinery or equipment being rented , and the rental rate…
The most substantial changes are to provision 2.(3), which are discussed in the next section of this article. A very subtle change is the elimination of the phrase “to others who use the rental machinery or equipment.” It’s hard to think of the circumstances contemplated by the legislature for this change as the “rental” of equipment or machinery necessarily requires that the items be rented “to others,” but nevertheless, the phrase was always superfluous and its removal has little effect.
View the full text of the final passed Act, Senate Bill 357.
More Breathing Room With Missouri Preliminary Notice Requirement
The paramount change created by this legislative action affords equipment and machinery rental companies in Missouri more breathing room to comply with the statutes and protect mechanics lien rights. The previous law required preliminary notice be sent within just 5 days of leasing equipment or machinery, but the new law allows an additional 10 days, now requiring notice be sent within 15 days from when the equipment first gets used on the property.
Further, it is no longer a requirement that the preliminary notice identify the rental rate negotiated between the parties. This is a big deal for the parties to these transactions since they frequently want the terms of the rental agreement to remain confidential and not passed along to the developer, general contractor or others.