(as
published in the Western Business Journal)
Whether you are a landowner or a service provider, a "construction lien" (or "mechanic's lien) is an important part of a construction project. Under Montana law, construction liens arise in favor of those who furnish services or materials under a "real estate improvement contract," to secure payment under the contract. If properly created, the lien remains on the property and may complicate the future sale of the property.
A construction lien may arise under an agreement to perform services, including labor, or to furnish materials for the purpose of producing a change in the physical condition of the real estate. However, construction liens for labor or materials cannot arise against a structure unless the structure is attached to the land.
The general rule under Montana law is that a construction lien arises only upon the completion of the contracted work. The exception to this rule is that a lien may be valid if the contractor substantially completes performance under the real estate contract, or if he was prevented from completing his work by the breach of the owner or a third party.
Typically, a person claiming a construction lien must give notice of the right to claim a lien to the owner of the property. If a lien claimant must provide notice, it must be in writing and filed with the clerk and recorder in the county where the real estate is located, within five business days after the date on which the notice is given. The following must be included in the lien claimant's notice: (a) description of the real estate; (b) description of services or materials provided; (c) date of mailing; (d) owner's name and address; (e) name and address of the person claiming the lien and with whom he contracted; (f) date services or materials were first and last finished; and (g) amount remaining unpaid. A certification must be attached to the lien by the lien claimant stating that a copy of the lien was served upon each contracting owner named in the lien.
Following Montana law precisely is key to successful enforcement of the construction lien. If you are concerned about compliance with the law, you should obtain legal advice from a law firm specializing in business or construction law. Moulton law firm has extensive experience serving the business client.
| Return to Publication List |
|---|