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Can you file a mechanic's lien for monies that are owed but not yet due?

Our client only owes us retainage / retention left for a project in which we agreed to allow the General Contractor to withhold this retainage. We only have 4 days left to file a mechanic's lien before the deadline for Missouri. Are we able to file a lien for retainage? Can you file a lien prior to the state's lien deadline to protect your rights even if the contract allows for longer payment terms?

1 reply

Feb 5, 2019

This is a very good question. The intersection between contract requirements and lien rights is very complex and confusing. And, it can put people in a difficult spot to navigate with respect to preserving relationships.

The general rule is that, since the right to file a mechanics lien is given by statute (pursuant to well-entrenched public policy to protect the payment rights of construction participants) contractual provisions that would hinder the ability to file a valid mechanics lien are usually disallowed. These types of usually disallowed contractual provisions can be as explicit as a "no lien clause" or be an advance waiver of rights, or even payment timing provisions. In Missouri, the rule is that lien waivers prior to work “in anticipation of and in consideration for the awarding of a contract or subcontract to perform work or supply materials for an improvement upon real property” are not allowed.

Another general rule is that parties have the ability to file a lien once the labor or materials have been furnished to the job for which they have not been paid, provided the statutory prerequisites, such as providing notice, have been met. At that point the property has been improved by the labor or material furnished by the claimant, and the lien may be filed. In Missouri, the deadline to file a mechanics lien is 6 months "after the indebtedness shall have accrued". Missouri courts have determined that, for the purpose of lien rights, "indebtedness accrues" on last date on which work was furnished to the project. Indebtedness in this respect is not a reference to when payment is due pursuant to the contract.

This means that a claimant, in order to comply with the statutory deadlines, may be forced to file a lien prior to the date on which they actually agreed to be paid in order to maintain those rights.

Note, however, that Missouri requires a notice of intent to lien to be provided at least 10 days prior to filing a lien. It is likely a good idea, if that notice has already been served on the owner, to reach out to the GC and owner and talk it out. Communication is key to maintaining relationships. Nobody wants a lien filed, but if it is explained that it is understood that the payment terms have not yet expired, but that lien rights would be completely lost if not filed, it may be possible to at least partially mitigate a negative impact to the relationships on the project. Good luck getting paid.

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