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New MISSISSIPPI notices with May 2014 PreLien2Lien upgrade

The state of MISSISSIPPI enacted new lien laws on April 11, 2014. Effective immediately, Subcontractors, Sub-Contractors and Material Suppliers who were unjustly denied construction lien rights in the past were finally awarded those rights like those that General Contractors in the state and contractors of all types in the other 49 states and the District Of Columbia were awarded previously.

Totally new for all contractors MISSISSIPPI Code § 85-7-409 (3) requires on single family construction a Pre-Lien Notice To Owner be sent by a lien claimant to the Owner ten (10) days in advance of recording a MISSISSIPPI Claim Of Lien.

Totally new lien waivers, copied almost word for word using the state of GEORGIA’s statutory lien waivers, take the place of the traditional Conditional Final or Progress and Unconditional Final or Progress waivers. MISSISSIPPI Code § 85-7-433 (1) mandates that a Interim Waiver And Release Upon Payment be used when a partial payment – not the final payment – is promised, or more preferably, received and deposited. If a Claim Of Lien is to be filed later, lien rights can only be for equipment, labor, materials or services provided after the date specified on an Interim Waiver And Release Upon Payment.

MISSISSIPPI Code § 85-7-433 (2) mandates that a Waiver And Release Upon Final Payment be used when a final payment is promised, or more preferably, received and deposited.

Finally, MISSISSIPPI Code § 85-7-419 mandates that a Affidavit Of Nonpayment be used within sixty (60) days of executing the Waiver And Release Upon Final Payment when a final payment is promised but not received, or a check received bounces. A Affidavit Of Nonpayment needs to be filed with the Clerk in the county where the project is located.

PreLien2Lien V.18.05.01 incorporates these new notices.

Recording a MISSISSIPPI Claim Of Lien in Hinds County

Recording construction liens in MISSISSIPPI is reserved exclusively for General Contractors, meaning you MUST be in direct contract WITH the Property Owner, or an Owner’s Agent or Representative in order to record a Claim Of Lien against the property.

On private Commercial/Existing Residential/New Residential projects General/Prime contractors have up to twelve (12) months after the invoice due date to record a MISSISSIPPI Claim Of Lien. Recently our TRADITION NOTICE SERVICES division was approached by a TEXAS based residential roofing company that was owed money on two projects within Hinds County, MS.

Claim Of Liens are recorded in the county where the construction related improvement is located with a Chancery Clerk, the county Auditor/Treasurer/Clerk of the Chancery Court. A notice must include the street address of the property. It is also helpful to include the Assessor’s Parcel Number (APN).

Fees are 11.00 total first fifteen (15) pages, $1.00 each additional page of 8-1/2″ x 11″ paper. Make checks payable to: HINDS COUNTY CHANCERY CLERK. Out-of-state business checks are accepted. Include a Self Addressed Stamped Envelope. Conforming copies are not accepted or processed.

Actual Recording is fast, just one (1) business day. You can view information on their website the same day a lien is recorded. Original documents are mailed back with one (1) week after recordation.

The same details above apply to recording a Release Of Claim Of Lien in Hinds County.

MISSISSIPPI court ruling takes away all lien rights from Subcontractors

MISSISSIPPI has always been one of the worst states in the U.S. for subcontractors to do business in. A recent ruling on October 10, 2013 by the United States Court of Appeals for the Fifth Circuit only made things go from worse to horrible. Previously, Subcontractors on construction improvements could not file a a contruction lien IF they were not in direct contract with the Owner. A partial work around that was highly employed to help force payment was use of the Stop Notice. By instructing the Owner to withhold funds from the General Contractor until the GC paid an invoice(s) in full, Subcontractors at least had a reasonable chance for a solvent General Contractor to realize slow or non payment would not be tolerated by a Subcontractor.

The court ruling (Noatex Corporation v. King Construction of Houston, LLC, 2013 U.S. App. LEXIS 20656 (5th Circuit, October 10, 2013) in effect made use of a Stop Notice “illegal.” The argument was successfully made by the General Contractor that a Subscontractor sending an Owner a Stop Notice is “an unconstitutional violation of procedural due process.” Never mind the fact then that a GC then has all the rights to lien, but the poor supplier or tradesman providing labor or materials thus has NO rights.

What to do in the short term? Easy to say, hard to implement, but aggresive pre-payment terms in combination with attempting to get a contract with an Owner are the only options unless you simply walk away from business. Hopefully lobbyist for MISSISSSIPPI subcontractors will get the upper hand and get the law corrected with not only a Stop Notice being an option again but also the new creation of lien rights for MISSISSIPPI subcontractors.

MISSISSIPPI gets new notices, custom template technology (CTT)

If the weekend does not have great golf weather, I am usually on the laptop working in between my kids Saturday Roseville Youth Soccer games.

This weekend I just finished writing the new notices for the state of MISSISSIPPI. It is the 36th state to have it legal notices entirely re-written in PreLien2Lien. They also have (CTT) Custom Template Technology, enabling each template notice to be customized for a one-time $50 fee.

Subcontractors have it tough here – the right to record a lien is reserved exclusively for General/Prime Contractors. Also, unlike neighboring states there is no 1st notice law for Subcontractors to notify Owners of the future right to lien. You still have the option of sending a Preliminary Notice. It will improve your chances of being paid on a timely basis, as it notifies all legal parties of your future right to file a Bond Claim or Stop Notice in the event you are not paid on a timely basis.

General/Prime Contractors (Private Projects): MISSISSIPPI Code Annotated § 85-7-133 mandates that a Claim Of Lien can be filed only by the Prime/General Contractor who is in direct contract with the Owner. It should be recored with the Chancery Clerk in the county in which the project is located. It must be recorded no later than twelve (12) months after the invoice due date after providing equipment, labor, materials or services for the improvement of a project. A recorded copy of the Claim needs to be delivered promptly to the Owner and other legal parties (Owner Agent, Lender) after the Claim Of Lien is recorded.

Subcontractors (Private Projects): Anyone providing equipment, labor, materials or services who is NOT in direct contract with the Owner has to move aggressively when they are not getting paid. MISSISSIPPI Code Annotated § 85-7-181 mandates that in lieu of a Claim Of Lien, a Subcontractor on a commercial or residential project must deliver a Stop Notice to the Owner and General/Prime Contractor in order to stop payment of funds to the General/Prime Contractor owed to the Subcontractor. The Notice should be delivered in person or by Certified Mail to the Owner of the property and the General/Prime Contractor along with any other legal parties related to the improvement of the property (Customer, Lender).