Conditional Waiver and Release of Lien Upon Final Payment
Note: This summary is not
intended to be an all inclusive discussion of Montana's construction or
mechanic's lien laws, but does include basic provisions.
What is a construction or mechanic's lien?
Every State permits
a person who supplies labor or materials for a construction project to
claim a lien against the improved property. While some states differ
in their definition of improvements and some states limit lien claims to
buildings or structures, most permit the filing of a document with the
local court that puts parties interested in the property on notice that
the party asserting the lien has a claim. States differ widely in
the method and time within which a party may act on their lien. Also
varying widely are the requirements of written notices between property
owners, contractors, subcontractors and laborers, and in some cases lending
institutions. As a general rule, these statutes serve to prevent
unpleasant surprises by compelling parties who wish to assert their legal
rights to put all parties who might be interested in the property on notice
of a claim or the possibility of a claim. This by no means constitutes
a complete discussion of construction lien law and should not be interpreted
as such. Parties seeking to know more about construction laws in
their State should always consult their State statutes directly.
Who can claim a lien in this State?
A person who furnishes
services or materials pursuant to a real estate improvement contract may
claim a construction lien to secure the payment of his contract price.
M.C.A. § 71-3-523.
How long does a party have to claim a lien?
A Lien Claim must
be filed within ninety (90) days of the final furnishing of material or
services or within ninety (90) days of the filing of a Notice of Completion
by the property owner. M.C.A. § 71-3-523.
What kind of notice is required prior to claiming
a lien?
Some parties will be required to file a Notice of Right to Claim Lien.
A Notice is NOT required by (a) a person who furnishes services
or materials directly to the owner at 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; or (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.
Generally, if required, a Notice of Right to Claim Lien must be filed within
twenty (20) days after the date that materials and services began to be
provided. These Notices are valid for one (1) year after filing,
but may be extended an additional (1) year after the filing of a Continuation
Notice. If a Notice of Right to Claim Lien is required, an unexpired
Notice of Right to Claim Lien or Continuation Notice is necessary before
a lien may be claimed. M.C.A. § 71-3-531.
By what method is a lien filed in this State?
A Lien Notice must be
filed within ninety (90) days of the final furnishing of services and materials
or the filing of a Notice of Completion by the property owner. If
a Notice of Right to Claim a Lien is required, the Lien Notice must declare
that the Notice was served on the property owner or that a Notice is not
required. Montana statutes set out the form for a Lien Notice in
M.C.A. § 71-3-536.
How long is a lien good for?
All actions to enforce
a lien must be commenced within two (2) years from the date of the filing
of the lien. M.C.A. § 71-3-562.
Are liens assignable?
Montana statutes do
not have a provision which states that liens may be assigned to other parties.
Does this State require or provide for a notice
from contractors and subcontractors to property owners?
Yes. Montana law
provides for a Notice of Right to Claim a Lien. This Notice is issued
by any Lien Claimant to the property owner and serves to put the property
owner on Notice that a lien may be claimed against his property.
Generally, it must be filed within twenty (20) days after the first material
or services are furnished. A copy of the Notice must be sent
to the contracting owner by certified mail or delivered personally, and
filed with the county clerk within five (5) days of service. This
Notice is effective for one (1) year unless extended an additional one
(1) year by a Continuation Statement. M.C.A. § 71-3-531.
Does this State require or provide for a notice
from the property owner to the contractor, subcontractor, or laborers?
Montana statutes allow
a property owner to file a Notice of Completion after (a) the written acceptance
by the contracting owner, his agent, or representative of the building,
improvement, or structure, or (b) the cessation from labor for 30
days upon any building, improvement, or structure, or the alteration, addition
to, or repair thereof.
Any party that wishes
to claim a lien must do so within ninety (90) days of the filing of this
Notice. The Notice of Completion is required to be published once
a week for three weeks in a local newspaper and an affidavit attesting
to the publication must be attached to the Lien Notice to be filed. M.C.A.
§ 71-3-533.
Does this State permit a person with an interest
in property to deny responsibility for improvements?
No. Montana statutes
do not provide for a Notice of Non-Responsibility as in some other States.
Is a notice attesting to the satisfaction of a
lien provided for or required?
Yes. Montana statutes
require a lien claimant whose lien has been satisfied to acknowledge the
satisfaction of that lien or be held liable for any damages that result
from the refusal to do so. M.C.A. § 71-3-537.
By what method does the law of this State permit
the release of a lien?
Montana statutes
have no specific provision for the release of a lien, other than by payment
in full or by expiration of the statute of limitations after two (2) years.
Does this State permit the use of a bond to release
a lien?
Yes.
Montana statutes allow a contracting owner to substitute a bond in the
amount of one and one half times the amount of the lien claimed.
Upon the acceptance of the bond by the county clerk, the lien against the
real property shall be discharged and released. M.C.A. §
71-3-551.
