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Committee hears bill to clear stale construction liens from property records
Summary
House Bill 465 would require a claimant who files a construction-lien foreclosure to record notice within a set window after the two-year limitation period to avoid leaving stale liens on title; sponsor said the change would clean up title records and protect property transactions.
Representative Steve Fitzpatrick (House District 24) told the committee that House Bill 465 is intended to prevent stale construction liens from clouding property titles. Under current practice, Fitzpatrick said, claimants who file a construction lien but do not foreclose can leave a lien on the record indefinitely even though the underlying statute of limitations to foreclose is two years.
The bill would require that, within 90 days after the expiration of the two-year limitation period for foreclosing a construction lien, a claimant must file a notice in the clerk and recorder's records that includes a copy of the foreclosure complaint; if the notice is not filed, Fitzpatrick said the lien would be treated as expired and would no longer encumber the title. "This just cleans up the chain of title," Fitzpatrick said, describing the change as a way to prevent old, invalid liens from blocking sales or transfers.
The Montana Bankers Association representative (Sam Sall) told the committee lenders "occasionally" encounter stale liens when reviewing property for transactions and urged passage. Committee members asked whether the bill would interfere with a claimant's ability to recover payment; Fitzpatrick responded that claimants already have a two-year window under current law to foreclose the lien and that HB 465 would not alter that substantive right but would remove dead liens that have not been enforced.
The committee closed the hearing on HB465; no vote was recorded in the transcript.
