The Construction Payment Blog has been keeping a close eye on the tumultuous state of mechanics lien law in Mississippi for the past 6 months.
It seemed like change was on the horizon when the United States Court of Appeals for the Fifth Circuit deemed Mississippi’s Stop Notice law facially unconstitutional as it deprived general contractors of their property without due process of law. The change began to take effect with the passage of Senate Bill 2622, which was originally drafted in January, then amended, and passed as amended on February 12, 2014.
That bill, with slight alterations, has been signed into law by the governor of Mississippi – effecting dramatic changes to the lien law scheme. It was time for Mississippi to expand the rights provided by mechanics liens to more parties than just general contractors, and to come closer in line with the view of every other state. This reinvention of the security available on construction projects in Mississippi, should set the stage for growth in the construction industry in that state.
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What Part of Mississippi Lien Law Is Changed?
In a word: Everything.
This is a radical reinvention of the entire statutory scheme, and of the availability of the mechanics lien instrument for the construction industry in Mississippi. Where previously only contractors with a direct contract with the property owner were allowed mechanics lien protection, now the ability to claim a mechanics lien extends to the following parties:
(a) All contractors, all subcontractors and all materialmen furnishing material for the improvement of real estate;
(b) All registered architects or professional engineers furnishing plans, drawings, designs, or other architectural or engineering services on or with respect to any real estate;
(c) All registered land surveyors performing or furnishing services on or with respect to any real estate.
Worth noting, however, is that the new statute specifically defines “materialmen” as a party furnishing materials to a prime or first-tier subcontractor. This means that material suppliers to a sub-sub or below is not protected by the new Mississippi scheme. Also, “subcontractor” is similarly limited by definition. For the purposes of Mississippi lien protection, a subcontractor is defined as only a first or second-tier sub. Third tier subcontractors are excluded from lien protection.
It is equally important to note that, when required by statute, a valid license is necessary to the ability to claim a mechanics lien.
There are also certain notice requirements that differ based on whether the lien is claimed against residential or non-residential property, and there is specific wording required the be included on the face of the lien document.
The recent changes to Mississippi lien law will be discussed in more detail in upcoming posts – but for now, be aware that the mechanics lien scheme in Mississippi has been drastically altered. Furthermore, you can find some important Mississippi Mechanics Lien Law Resources in our lien law resource center.