There are numerous changes to the lien law with different provisions for commercial and residential construction.
Some of the key points on the lien law are as follows:
- Most notably, lien rights are extended to first and second tier sub-contractors and suppliers under the new law.
- There are prerequisites for filing a lien including a limited time for filing the lien.
- For residential liens there is a prelien notice requirement. Ten days prior to filing a lien, the owner must be given notice of the intent to file a lien using a form that is prescribed in the law.
- Also, on residential projects, payment by the owner is an absolute defense against a lien being filed.
- Stiff penalties can be assessed for anyone filing a false lien.
SB 2622 was needed in response to constitutional issues created in the Noatex vs. King Construction case. In 2012, Judge S. Allan Alexander ruled that the Mississippi stop notice law is unconstitutional. The 5th Circuit Court of Appeals upheld the ruling in the fall of 2013. As a result of the ruling, sub-contractors and material providers had no expedient way to pursue construction disputes involving nonpayment from contractors and a new law must be created as a remedy.