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.
Note: For an update on this story, please see our more recent entry, Mississippi Legislature Enacts Changes to Construction Lien Status.