Perspectives

Mississippi Legislature Enacts Changes to Construction Lien Statutes

The Mississippi legislature has taken action in response to a 2013 decision by the 5th Circuit Court of Appeals  (see Mississippi’s “Stop Notice” Statute Declared Unconstitutional). That decision limited the rights of subcontractors and suppliers to assert a “stop notice” claim against the owner’s funds on a private construction project in Mississippi. Previously, Mississippi was the only state in the union that did not permit subcontractors to assert a mechanic’s lien claim. The new legislation, which was signed into law by the Governor of Mississippi on April 11, 2014, completely overhauls the Mississippi Lien Statutes. Below are a few highlights of the new laws:

• Mechanic’s lien rights are now in place for subcontractors and sub-subcontractors (and material suppliers who contract direct with the general contractor or with the general contractor’s subcontractor);

• Sub-subcontractors (and material suppliers who contract with subcontractors) must serve a preliminary notice within 30 days after the first date of furnishing labor or materials;

• A mechanic’s lien claimant has 90 days to record the lien after the “last date” of furnishing labor or materials;

• The lien may attach to the landlord’s interest on tenant improvement projects;

• Any agreement to waive the right to file or assert a mechanic’s lien claim is void; and,

• The court may award attorney’s fees to a lien claimant who foreclosures its lien claim in a lien foreclosure action lawsuit.

The laws went effect immediately after passage on April 11, 2014. WFJ will update its Mississippi Lien / Bond Opinion Letter in the near future.

The above list of changes is not exhaustive, so if you have any comments or questions, please contact Mark Anderson (manderson@wfjlawfirm.com) or Dan Reich (dreich@wfjlawfirm.com).

Note: This is an update to our previous entries, Mississippi Legislature Proposes Changes to Construction Lien Statute and Mississippi’s “Stop Notice” Statute Declared Unconstitutional.