A Montana Notice of Right to Claim a Lien is their version of a traditional preliminary notice. It’s important to know the ins and outs of this notice requirement, as a misstep in the process could seriously affect the scope of protection provided by mechanics lien rights. Montana has a unique approach to these preliminary notices. So, let’s take a closer look at the specific requirements for a Montana Notice of Right to Claim a Lien.
Montana Notice of Right to Claim a Lien
Under Montana law, a notice of the right to claim a lien (i.e., preliminary notice) is required to secure mechanics lien rights. However, there are several exceptions to the requirement that can tend to get pretty confusing. Not only that, but these notices need to be both sent and filed in order to be valid. Here’s a breakdown of everything you need to know.
Who needs to send a Notice of Right to Claim a Lien?
Montana’s construction lien statute is unique, as it lists the parties who aren’t required to send notice as opposed to who needs to send notice. Given that, all potential lien claimants must send this notice in order to secure lien rights, except for the following:
- Anyone who contracted directly with the property owner;
- Wage laborers;
- Anyone furnishing labor or materials to a residential property with 5 or more families; and
- Anyone furnishing labor or materials to a project that is partially, or wholly, commercial.
That last exception can be particularly challenging, as sometimes the line between a residential and commercial project can be blurry. For instance, the most commonly referenced case concerning this is JTL Group Inc. v. New Outlook LLP. In that case, although working on a residential subdivision, since the work entailed paving roads and installing underground utilities and sewer lines, it was considered commercial.
Required information on a Notice of Right to Claim a Lien
In order to be considered a valid preliminary notice, the document needs to contain certain information. This includes (1) the date of mailing, (2) the owner’s name and address, (3) the claimant’s name and address, (4) a description of the property sufficient for identification, and (5) the statutorily required notice language found in M.C.A. §71-3-532.
If this information isn’t readily available, the law provides some relief. All direct contracts with the property owner in Montana are required to have the owner and property information included. In turn, subcontractors have the right to request this information from the general contractor. Upon receipt of a written request for information from a sub, the contractor is required to provide that information within 5 business days.
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Sending a Notice of Right to Claim a Lien
A Montana Notice of Right to Claim a Lien should be sent to at least two different places. The first is to the property owner themselves. The timeframe for getting the notice delivered to the owner can either be 20 days or 45 days, depending on the circumstances. The default timeframe is 20 days. However, if there is a lender on the project, and the property is not owner-occupied, then the deadline is 45 days. This can be either served personally or sent by certified mail with return receipt requested.
If the deadline to send notice to the owner is missed, all is not lost. A Notice of Right to Claim a Lien can be sent at any time, but it will only secure lien rights for labor or materials provided in the preceding 20 or 45 days (whichever is applicable).
In addition to sending this notice to the property owner, a copy of the notice must also be filed in the county clerks office where the property is located. Once the owner has received notice, the claimant has 5 days to file. This should be done either in person or filed electronically. This can also be mailed in, but given the short time frame, and the potential for backlog at the county office, this option isn’t recommended.
An important thing to note regarding these notices in Montana is, although the filed notice expires within a year, it can be extended. If, before the notice expires, a notice of continuation is filed, then the notice will be valid for another year.
Bottom line
If keeping track of all these exceptions, and determining when this notice is required or not is too much, don’t worry about it. You should be sending preliminary notices on every construction project, regardless of whether it’s required or not. There are many other benefits to sending a preliminary notice besides mechanics lien rights. Notices inform everyone on the project who you are, and what you are providing to the project. This helps to speed up payment, increase visibility, and open the channels of communication. There’s no reason not to send one.
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