Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 160-H.F.No. 1282 
           An act relating to mechanics' liens; clarifying and 
          simplifying the contractors' and subcontractors' 
          notice; providing that failure to strictly comply with 
          subcontractor notice requirements does not result in 
          loss of lien under certain circumstances; amending 
          Minnesota Statutes 1988, section 514.011, subdivisions 
          1, 2, and by adding a subdivision. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 514.011, 
subdivision 1, is amended to read: 
    Subdivision 1.  [CONTRACTORS.] Every person who enters into 
a contract with the owner for the improvement of real property 
and who has contracted or will contract with any subcontractors 
or material suppliers to provide labor, skill or materials for 
the improvement shall include in any written contract with the 
owner the notice required in this subdivision and shall provide 
the owner with a copy of the written contract.  If no written 
contract for the improvement is entered into, the notice must be 
prepared separately and delivered personally or by certified 
mail to the owner or the owner's authorized agent within ten 
days after the work of improvement is agreed upon.  The notice, 
whether included in a written contract or separately given, must 
be in at least 10-point bold type, if printed, or in capital 
letters, if typewritten and must state as follows: 
    "(a) persons or companies furnishing Any person or company 
supplying labor or materials for the this improvement of real 
to your property may enforce file a lien upon the improved 
land against your property if they are that person or company is 
not paid for their the contributions, even if the parties have 
no direct contractual relationship with the owner;. 
    (b) Under Minnesota law permits the owner to withhold from 
the owner's contractor as much of the contract price as may be 
necessary to meet the demands of all other lien claimants, you 
have the right to pay persons who supplied labor or materials 
for this improvement directly the liens and deduct the cost of 
them this amount from the our contract price, or withhold the 
amounts due them from the owner's contractor us until the 
expiration of 120 days from the after completion of the 
improvement unless the contractor furnishes to the owner waivers 
of claims for mechanics' liens we give you a lien waiver signed 
by persons who furnished supplied any labor or material for the 
improvement and who provided the owner with gave you timely 
notice." 
    A person who fails to provide the notice shall not have the 
lien and remedy provided by this chapter. 
    The notice required by this subdivision is not required of 
any person who is an owner of the improved real estate, to any 
corporate contractor of which the owner of the improved real 
estate is an officer or controlling shareholder, to any 
contractor who is an officer or controlling shareholder of a 
corporation which is the owner of the improved real estate, or 
to any corporate contractor managed or controlled by 
substantially the same persons who manage or control a 
corporation which is the owner of the improved real estate. 
    Sec. 2.  Minnesota Statutes 1988, section 514.011, 
subdivision 2, is amended to read: 
    Subd. 2.  [SUBCONTRACTOR TO GIVE NOTICE.] (a) Every person 
who contributes to the improvement of real property so as to be 
entitled to a lien pursuant to section 514.01, except a party 
under direct contract with the owner must, as a necessary 
prerequisite to the validity of any claim or lien, cause to be 
given to the owner or the owner's authorized agent, either by 
personal delivery or by certified mail, not later than 45 days 
after the lien claimant has first furnished labor, skill or 
materials for the improvement, a written notice in at least 
10-point bold type, if printed, or in capital letters, if 
typewritten, which shall state: 
    "Please take notice that persons or companies furnishing 
This notice is to advise you of your rights under Minnesota law 
in connection with the improvement to your property.  
    Any person or company supplying labor or materials for the 
this improvement of real property may enforce file a lien upon 
the improved land against your property if they are that person 
or company is not paid for their the contributions, even if the 
parties have no direct contractual relationship with the owner.  
We ......................................................
             (name and address of subcontractor)
have been hired by your contractor ......................
                                (name of your contractor)
to provide ...................... or ............... for 
             (type of service)         (material)
use in improving your property this improvement.
To the best of our knowledge, we estimate our charges 
will be .............................. .
        (value of service or material)
    If we are not paid by your contractor, we can file a claim 
against your property for the price of our services unless, 
prior to your receipt of this notice, you have paid to your 
contractor the full amount of all improvements furnished.  
    To protect yourself, Minnesota law permits you, as the 
owner, to withhold from your contractor as much of the contract 
price as may be necessary to meet our demands, You have the 
right to pay us directly and deduct the cost of them this amount 
from the contract price, or withhold the amount of our claim due 
us from your contractor until the expiration of 120 days from 
the after completion of the improvement unless your contractor 
furnishes to gives you a lien waiver of claim for mechanics' 
liens signed by me (us)."  
    We may not file a lien if you paid your contractor in full 
before receiving this notice." 
    (b) A person entitled to a lien does not lose the right to 
the lien for failure to strictly comply with this subdivision if 
a good faith effort is made to comply, unless the owner or 
another lien claimant proves damage as a direct result of the 
failure to comply. 
    Sec. 3.  Minnesota Statutes 1988, section 514.011, is 
amended by adding a subdivision to read: 
    Subd. 6.  [USE OF FORMER NOTICE PERMITTED.] Until August 1, 
1990, a notice given in conformity with subdivisions 1 and 2 of 
Minnesota Statutes 1988 is valid. 
    Sec. 4.  [REPEALER.] 
    Section 3 is repealed effective August 1, 1990. 
     Sec. 5.  [EFFECTIVE DATE.] 
    Sections 1 to 3 are effective August 1, 1989, and apply to 
notices given on or after that date. 
    Presented to the governor May 16, 1989 
    Signed by the governor May 17, 1989, 6:17 p.m.