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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.

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.

Lien Reminder (LR) system added for state lien deadlines

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This daily commitment has resulted in a significant new feature in PreLien2Lien which will benefit all users in 2009. The Lien Reminder (LR) system, co-developed by myself and Miriam Liskin, is a new part of the PROJECT tab, helping guide users towards significant state lien deadlines.

The first phase of the system will focus exclusively on private (Commercial and Residential) deadlines. As the year progresses, reminder capability will be added for Public jobs.

All PreLien2Lien2Lien users can benefit from using the Lien Reminder system. States with first notice deadlines like CA, AZ, MI (20 days), OH (21 days) NV (31 days), and FL (45 days) allow zero forgiveness to file a lien later on if the first notice is not delivered. The lien reminder system will calculate how many days you to deliver the notice from the first date equipment, labor, materials or services are provided to the jobiste.

Owners and GeneralPrime Contractors can shorten the lien timeframe by filing a Notice Of Completion. AZ, CA, NV and MA are just a few of the states that the Lien Reminder system will calculate the revised lien deadline when a Notice Of Completion recording date is entered.

Also, deadlines often are shorter for ExistingNew Residential projects compared to Commercial projects. Several states, including AL, MO, NY, OH, TX and VA fall into this category.

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