I am renting to own a property and she is getting it appraised to take a loan out on it after I have invested 30k dollars. I want to put a lein on it so she can't do that and chance losing it through her defaultin on the loann
1 reply
May 17, 2018
That's an interesting question. First, I'll note that this isn't really the intended use for a mechanics lien. When lien laws are manipulated to fit situations other than their intended purpose (nonpayment in the construction industry), the chances increase that a lien might be considered invalid or even fraudulent. If a rent to own agreement has been put into a written contract, a renter will likely have other potential legal remedies. Anyway, as for liens - it's a tricky question. First, it's important to determine whether the work performed is lienable in the first place. Missouri is pretty generous here - most parties who have provided labor, services, or materials for the improvement of real property will be entitled to lien rights. Granted, there are a number of restrictions reining in the right to file a lien. One of the first, and most important, considerations is that Missouri requires claimants to send preliminary notice prior to filing any lien claim. All parties who contract directly with the property owner (excluding architects) must provide the owner with a disclosure notice prior to receiving any payments from the owner. If that notice is required and not provided, a valid mechanics lien cannot be filed. Further, the deadline for filing a mechanics lien is very strict. In Missouri, the deadline to file a lien is 6 months from the last day that labor and/or materials was furnished to the project. Thus, if labor or materials have not been provided for the improvement of the property in the last 6 months, there's a possibility that the deadline to file has passed. Finally, it's worth noting that if payment wasn't contemplated in exchange for the work done, it may be hard to justify a lien filing. Again - the further work strays from a more typical construction agreement (work being done for an agreed upon sum), the more questionable it becomes whether a mechanics lien will be an appropriate remedy. Other remedies - such as a breach of contract claim or an unjust enrichment claim - might be more appropriate.