Mississippi Legislature Proposes Revisions to Construction Lien Statute
The Mississippi legislature has taken action in response to a recent 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 current proposed legislation, which is expected to be signed by the governor in the very near future, completely overhauls the Mississippi Lien Statutes. Below are a few of the highlights of the proposed legislation:
– Mechanic’s lien rights will be established 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 will have 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 proposed bill will take effect immediately after passage. WFJ will continue to follow this important legislation, and update this article and the Mississippi Lien / Bond Opinion Letter once the bill is signed by the governor.
The above list of proposed changes is not exhaustive, so if you have any questions, please contact Mark Anderson (firstname.lastname@example.org) or Dan Reich (email@example.com).
Note: For an update on this story, please see our more recent entry, Mississippi Legislature Enacts Changes to Construction Lien Status.