we sold equipment to a contractor for a project in Missouri. The end user has paid the contractor. The contractor hasn't paid us. Are we allowed to file a supplier lien on the end user's building if they have already paid the contractor?
1 reply
Jan 2, 2020
Missouri appears to be a "full price lien" state. Meaning, even if a property owner pays their prime contractor in full, that owner may end up having to pay for work twice if a sub-tier claimant (like a subcontractor, material supplier, or equipment lessor, etc.) doesn't get paid for the work that they do.
Of course, note that Missouri does have some restrictions on who's able to file a valid and enforceable mechanics lien against residential property. You can learn more about that here, if that's applicable to your situation: Who can file a Missouri Mechanics Lien?
Missouri's Notice of Intent to Lien requirement
Missouri is one of relatively few states which has a Notice of Intent to Lien requirement on its books. As a result, before sub-tier mechanics lien claimants can file their lien, they must first send a Notice of Intent to Lien to the property owner. That way, the owner has some notice about the payment dispute and hand and can work to resolve the payment dispute before a lien becomes necessary.
In fact, it's often a good idea to send a Notice of Intent to Lien to the project's general contractor as well. The more people that are aware of the potential claim, the more people that will be working toward resolving the issue. What's more, due to the drastic nature of lien claims, an owner, GC, or any other party above your customer on the job can help to put pressure on the customer in order to try and get the payment issue sorted out.
Levelset discusses that here: What Is a Notice of Intent to Lien and Should You Send One?