SENATE BILL NO. 476
INTRODUCED BY A. BISHOP
AN ACT REVISING THE LAWS RELATING TO CONSTRUCTION LIENS; REVISING THE FORM FOR GIVING NOTICE OF THE RIGHT TO CLAIM A CONSTRUCTION LIEN; PROVIDING THAT THE COUNTY CLERK AND RECORDER MAY ALLOW THE LIEN AND A NOTICE OF THE RIGHT TO CLAIM A LIEN TO BE FILED ELECTRONICALLY; AND AMENDING SECTIONS 71-3-531, 71-3-532, AND 71-3-535, MCA.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 71-3-531, MCA, is amended to read:
"71-3-531. Notice of right to claim lien required -- exceptions. (1) The following are not required to give notice of a right to claim a lien as required by this section:
(a) a person who furnishes services or materials directly to the owner at his the owner's request;
(b) a wage earner or laborer who performs personal labor services for a person furnishing any service or material pursuant to a real estate improvement contract;
(c) a person who furnishes services or materials pursuant to a real estate improvement contract that relates to a dwelling for five or more families; and
(d) a person who furnishes services or materials pursuant to a real estate improvement contract that relates to an improvement that is partly or wholly commercial in character.
(2) A person who may claim a construction lien pursuant to this part shall give notice of his the right to claim a lien to
the contracting owner in order to claim a lien.
(3) Except as provided in subsection (4), this notice must may not be given no later than 20 days after the date on which
the services or materials are first furnished to the contracting owner. If notice is not given within this period, a lien is
enforceable only for the services or materials furnished within the 20-day period before the date on which notice is given.
(4) When payment for services or materials furnished pursuant to a real estate improvement contract, excluding a
contract on an owner-occupied residence, is made by or on behalf of the contracting party from funds provided by a
regulated lender and secured by an interest, lien, mortgage, or encumbrance for the purpose of paying the particular real
estate improvement being liened, the notice required by this section must may not be given no later than 45 days after the
date on which the services or materials are first furnished to the contracting owner. If notice is not given within this period,
a lien is enforceable only for the services or materials furnished within the 45-day period before the date on which notice is
given.
(5) The notice of the right to claim a lien must be sent to the contracting owner by certified mail or delivered personally
to him the owner. Notice by certified mail is effective on the date on which the notice is mailed. If the notice is delivered,
written acknowledgement of receipt must be obtained from the owner. A person may not claim a construction lien unless he
the person has complied with this subsection.
(6) (a) A person who may claim a lien shall also file with the clerk and recorder of the county in which the improved
real estate is located a copy of the notice of the right to claim a lien, in the form required by 71-3-532. This copy must may
not be filed no later than 5 business days after the date on which the notice of the right to claim a lien is given to the
contracting owner.
(b) The county clerk and recorder may allow the notice of the right to claim a lien to be electronically filed.
(b)(c) The notice filed with the clerk and recorder for the purpose of public notice is effective for 1 year from the date of
filing. The notice lapses upon the expiration of the 1-year period unless the person who may claim a lien files with the clerk
and recorder a 1-year continuation of the notice prior to the date on which the notice lapses. The clerk and recorder may
remove the notice from the public record when it lapses.
(c)(d) The continuation statement must include:
(i) the clerk and recorder's file number of the notice;
(ii) the date on which the notice originally was filed; and
(iii) the name of the person to whom the original notice was given.
(d)(e) If a notice of a right to claim a lien is required under this section, a person may not claim a construction lien
pursuant to this part unless there is an unexpired notice of right to claim a construction lien or an unexpired continuation
notice filed with the clerk and recorder at the time he that the person files his the lien.
(7) At the request of any subcontractor or material supplier who may claim a lien through him a person providing
services or materials to a contracting owner, a the person shall furnish to the requestor within 5 business days:
(a) a description sufficient to identify the real estate being improved; and
(b) the name and address of the contracting owner."
Section 2. Section 71-3-532, MCA, is amended to read:
"71-3-532. Content of notice of right to claim lien. (1) The notice of the right to claim a lien must be in writing and state that it is a notice of a right to claim a lien against real estate for services or materials furnished in connection with improvement of the real estate.
(2) The notice must contain a description sufficient to identify the real estate against which the lien may be claimed.
(3) The notice must contain the following information and be in substantially the following form:
(a) date of mailing;
(b) owner's name;
(c) owner's address;
(d) name of person filing notice;
(e) address of person filing notice;
(f) a description sufficient to identify the property that is being improved; and
(g) the following notice:
NOTICE OF THE RIGHT TO CLAIM A LIEN
WARNING: READ THIS NOTICE. PROTECT YOURSELF FROM PAYING ANY CONTRACTOR OR SUPPLIER TWICE FOR THE SAME SERVICE.
To: ..... Date of mailing: .....
(Owner)
.....
(Owner's address)
This is to inform you that .......... has begun to provide .......... (description of services or materials) ordered by .......... for
improvements to property you own. The property is located at ...........
A lien may be claimed for all services and materials furnished to you if this notice is given to you within 20 days after
the date on which the services or materials described are first furnished to you. If the notice is not given within that time, a
lien is enforceable for only the services or materials furnished within the 20-day period before the date on which the notice
is given. However, if a regulated lender has provided the funds for the services or materials described in this notice, the
notice may be given 45 days after the date the services or materials are first furnished to you. If the notice is not given
within that time, a lien is enforceable for only the services or materials furnished within the 45-day period before the date
the notice is given.
Even if you or your mortgage lender have made full payment to the contractor who ordered these services or materials,
your property may still be subject to a lien unless the subcontractor or material supplier providing this notice is paid. This is
to inform you that .......... has begun to provide .......... (description of services or materials) ordered by .......... for
improvements to property you own. The property is located at ......... . If ......... is not paid, a lien may be filed against the
property. THIS IS NOT A LIEN. It is a notice sent to you for your protection in compliance with the construction lien laws
of the state of Montana.
This notice has been sent to you by:
NAME:.....
ADDRESS:.....
TELEPHONE:.....
IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, PLEASE CALL US
IMPORTANT INFORMATION ON REVERSE SIDE
IMPORTANT INFORMATION FOR YOUR PROTECTION
This notice has been sent to you by:
NAME: ..........
ADDRESS: ..........
TELEPHONE: .........
Under Montana's laws, those who work on your property or provide materials and are not paid have a right to enforce their claim for payment against your property. This claim is known as a construction lien.
If your contractor fails to pay subcontractors or material suppliers or neglects to make other legally required payments, the people who are owed money may look to your property for payment, even if you have paid your contractor in full.
The law states that all people hired by a contractor to provide you with services or materials are required to give you a notice of the right to claim a lien to let you know what they have provided.
WAYS TO PROTECT YOURSELF ARE:
-- RECOGNIZE that this notice of delivery of services or materials may result in a lien against your property unless all those supplying a notice of the right to lien have been paid.
-- LEARN more about the construction lien laws and the meaning of this notice by contacting an attorney or the firm sending this notice.
-- WHEN PAYING your contractor for services or materials, you may make checks payable jointly to the contractor and the firm furnishing services or materials for which you have received a notice of the right to claim a lien.
-- OBTAIN EVIDENCE that all firms from whom you have received a notice of the right to claim a lien have been paid or have waived the right to claim a lien against your property.
-- CONSULT an attorney, a professional escrow company, or your mortgage lender."
Section 3. Section 71-3-535, MCA, is amended to read:
"71-3-535. Attachment of lien -- filing. (1) A person's lien does not attach and may not be enforced unless, after
entering into the contract under which the lien arises, he the person has filed a lien not later than 90 days after:
(a) his the person's final furnishing of services or materials; or
(b) the owner files a notice of completion pursuant to 71-3-533.
(2) (a) The lien must be filed with the county clerk and recorder of the county in which the improved real estate is located, and the county clerk and recorder may allow the lien to be filed electronically.
(b) The person claiming the lien must shall certify to the county clerk and recorder that a copy of the lien has been
served on the owner of record as provided in 71-3-534(2).
(3) The lien statement must contain:
(a) the name and address of the person claiming the lien;
(b) a description of the real property against which the lien is claimed sufficient to identify it;
(c) the name of the contracting owner;
(d) the name and address of the party with whom the person claiming the lien contracted to furnish services or materials;
(e) a description of the services or materials provided;
(f) the amount unpaid for services or materials or, if no amount is fixed by the contract, a good faith estimate of the amount unpaid, designated as an estimate;
(g) (i) the date on which the services or materials were first furnished; and
(ii) the date on which the services or materials were last furnished; and
(h) a declaration that a notice of a right to claim a lien was given to the contracting owner or an explanation of why such
the notice was not required.
(4) A lien notice that is filed pursuant to this section before the person claiming the lien has substantially furnished
services or materials pursuant to a real estate improvement contract is not effective to create a construction lien unless the
lien claimant is prevented from fulfilling his the lien claimant's obligation because of the fault of another person.
(5) Except as provided in subsection (6), a lien attaches at the commencement of work as defined in 71-3-522.
(6) A lien attaches when it is filed if it is for the preparation of plans, surveys, or architectural or engineering plans or drawings for any change in the physical condition of land or structures that are not used incident to producing a change in the physical condition of the real estate."
- END -
Latest Version of SB 476 (SB0476.ENR)
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