Imagine buying the home of your dreams, moving in, and then a few weeks later get hit with a multi-thousand of dollar lien by a subcontractor who was never paid for the work done for the builder.
Unscrupulous builders don’t pay. Present law lets subcontractors file liens weeks after owners take possession of the home.
But the legislature has given those homeowners some important new protection by changing that system, requiring builders to notify subcontractors 45 days before closing of the closing date. The subcontractors have until five days before closing to file any claims.
Senate sponsor Eric Schmitt of Kirkwood says underwriters of mechanics lien coverage have had to pay out so many claims that many of them will no longer provide that coverage. That leads banks to stop extending credit and that, in turn, stops home sales.
If the governor signs the bill, the law goes into effect this fall.