Bill Text: MS HB744 | 2014 | Regular Session | Introduced
Bill Title: Subcontractor stop notice; revise.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2014-02-04 - Died In Committee [HB744 Detail]
Download: Mississippi-2014-HB744-Introduced.html
MISSISSIPPI LEGISLATURE
2014 Regular Session
To: Judiciary A
By: Representative Baker
House Bill 744
AN ACT TO PROVIDE FOR CONTRACTOR LIENS AND THE ENFORCEMENT AND NOTICE OF CONTRACTOR LIENS; TO CREATE NEW SECTION 85-7-301, MISSISSIPPI CODE OF 1972, TO DEFINE CERTAIN TERMS; TO CREATE NEW SECTION 85-7-303, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR LIENS FOR LABOR, SERVICES OR MATERIALS FURNISHED; TO CREATE NEW SECTION 85-7-305, MISSISSIPPI CODE OF 1972, TO PROVIDE HOW THE LIENS ARE CREATED AND RECORDED; TO CREATE NEW SECTION 85-7-307, MISSISSIPPI CODE OF 1972, TO REQUIRE CONTRACTORS TO LIST ALL SUBCONTRACTORS, MATERIALMEN, LABORERS AND EMPLOYEES; TO CREATE NEW SECTION 85-7-309, MISSISSIPPI CODE OF 1972, TO LIMIT THE RECOVERY OF SUBCONTRACTORS AGAINST A RESIDENTIAL HOMEOWNER UNDER CERTAIN CIRCUMSTANCES; TO CREATE NEW SECTION 85-7-311, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE ATTACHMENT OF LIENS TO BUILDINGS OR IMPROVEMENTS ON LEASED LAND; TO CREATE NEW SECTION 85-7-313, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE DISSOLVING OF LIENS; TO CREATE NEW SECTION 85-7-315, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE DISCHARGE OF A LIEN BY FILING BOND; TO CREATE NEW SECTION 85-7-317, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE RIGHTS OF CERTAIN PROFESSIONALS; TO CREATE NEW SECTION 85-7-319, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE WAIVER AND RELEASE OF LIEN AND BOND RIGHTS; TO CREATE NEW SECTION 85-7-321, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR EXTINGUISHMENT OF LIENS IF NO NOTICE OF COMMENCEMENT IS FILED; TO CREATE NEW SECTION 85-7-323, MISSISSIPPI CODE OF 1972, TO PROVIDE A TIME LIMITATION ON COMMENCING LIEN ACTIONS; TO PROVIDE FOR NOTICE OF CONTEST OF A LIEN; TO CREATE NEW SECTION 85-7-325, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE COMPUTATION OF TIME; TO CREATE NEW SECTIONS 85-7-327 AND 85-7-329, MISSISSIPPI CODE OF 1972, TO ADDRESS THE PRIORITY OF LIENS; TO CREATE NEW SECTION 85-7-331, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE ENFORCEMENT OF JUDGMENTS; TO CREATE NEW SECTION 85-7-333, MISSISSIPPI CODE OF 1972, TO PROVIDE A PENALTY FOR FILING A FALSE LIEN; TO AMEND SECTION 85-7-131, MISSISSIPPI CODE OF 1972, TO CONFORM; TO BRING FORWARD SECTION 85-7-133, MISSISSIPPI CODE OF 1972, FOR PURPOSES OF AMENDMENT; TO BRING FORWARD SECTION 11-15-101, MISSISSIPPI CODE OF 1972, FOR PURPOSES OF AMENDMENT; TO REPEAL SECTIONS 85-7-181, 85-7-183, 85-7-185, 85-7-197, 85-7-199, 85-7-201, 85-5-137 AND 85-7-139, MISSISSIPPI CODE OF 1972, WHICH PROVIDE FOR LIENS ON AMOUNTS DUE A CONTRACTOR AND THE RECORDING THEREOF; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The following shall be codified as Section 85-7-301, Mississippi Code of 1972:
85-7-301. The following words and phrases shall have the meanings ascribed herein unless the context clearly indicates otherwise:
(a) "Business day" means any day that is not a Saturday, Sunday, or legal holiday.
(b) "Contractor" means a contractor having privity of contract with the owner of the real estate.
(c) "Professional surveyor" means the same as the definition provided in Section 73-13-71.
(d) "Lien action" means a lawsuit, proof of claim in a bankruptcy case, or a binding arbitration.
(e) "Materials" means materials, tools, appliances, machinery, or equipment used in making improvements to the real estate.
(f) "Materialmen" means all persons furnishing the materials, tools, appliances, machinery, or equipment included in the definition of materials in paragraph (e) of this section.
(g) "Professional engineer" means the same as the definition provided in Section 73-13-3.
(h) "Registered forester" means the same as the definition provided in Section 73-36-3.
(i) "Registered land surveyors" and "registered professional engineers" means land surveyors or professional engineers who are registered as land surveyors or professional engineers under Title 73 at the time of performing, rendering, or furnishing services protected under this act.
(j) "Residential property" means single-family, two-family, three-family, and four-family residential real estate.
(k) "Statutory overnight delivery" means delivery of a document through the United States Postal Service or through a commercial firm that is regularly engaged in the business of document delivery or document and package delivery in which the sender:
(i) Has directed that delivery be not later than the next business day following the day on which the document is received for delivery by the United States Postal Service or the commercial firm; and
(ii) Receives a receipt acknowledging receipt of the document signed by addressee or an agent of the addressee.
(l) "Subcontractor" means subcontractors having privity of contract with the contractor. Subcontractor also means having privity of contract with a subcontractor having privity of contract with the contractor.
SECTION 2. The following shall be codified as Section 85-7-303, Mississippi Code of 1972:
85-7-303. (1) The following persons shall each have a special lien on the real estate, factories, railroads, or other property for which they furnish labor, services or materials:
(a) All mechanics of every sort who have taken no personal security for work done and material furnished in building, repairing, or improving any real estate of their employers;
(b) All contractors, all subcontractors and all materialmen furnishing material to subcontractors, and all laborers furnishing labor to subcontractors and persons furnishing material for the improvement of real estate;
(c) All registered architects or professional engineers furnishing plans, drawings, designs, or other architectural or engineering services on or with respect to any real estate;
(d) All registered foresters performing or furnishing services on or with respect to any real estate;
(e) All registered land surveyors performing or furnishing services on or with respect to any real estate;
(f) All contractors, all subcontractors and materialmen furnishing material to subcontractors, and all laborers furnishing labor for subcontractors for building factories, furnishing material for factories or furnishing machinery for factories;
(g) All machinists and manufacturers of machinery, including corporations engaged in the business, who may furnish or put up any mill or other machinery in any county or who may repair the same;
(h) All contractors to build railroads; and
(i) All suppliers furnishing rental tools, appliances, machinery or equipment for the improvement of real estate.
(2) Each special lien specified in subsection (1) of this section may attach to the real estate of the owner for which the labor, services, or materials are furnished if they are furnished at the instance of the owner, contractor or some other person acting for the owner or contractor and shall include the value of work done and materials furnished in any easement or public right-of-way adjoining the real estate if the work done or materials furnished in the easement or public right-of-way is for the benefit of the real estate and is within the scope of the owner's contract for improvements to the real estate.
(3) Each special lien specified in subsection (1) of this section shall include the amount due and owing the lien claimant under the terms of its express or implied contract, subcontract, or purchase order subject to Section 85-7-305(5).
(4) Each special lien specified in subsection (1) of this section shall include interest on the principal amount due in accordance with Section 75-17-1, 75-17-7 or 75-17-19 as applicable by law.
(5) Notwithstanding any other provision of this act, no lien shall exist in favor of any contractor, subcontractor, or sub-subcontractor who is unlicensed as required by either Section 31-3-1 et seq., or Section 73-59-1 et seq. Notwithstanding any other provision of this act, if a contract is rendered unenforceable because an unlicensed contractor, subcontractor, or sub-subcontractor has not complied when required with to Section 31-3-1 et seq., or Section 73-59-1 et seq., the unenforceability shall not affect the rights of any other persons to enforce contract, lien, or bond remedies and shall not affect the obligations of a surety that has provided a bond on behalf of the unlicensed contractor, subcontractor, or sub-subcontractor. It shall not be a defense to any claim on a bond or indemnity agreement that the principal or indemnitor is unlicensed as provided in Section 31-3-1 et seq., or Section 73-59-1 et seq.
SECTION 3. The following shall be codified as Section 85-7-305, Mississippi Code of 1972:
85-7-305. (1) To make good the liens specified in Section 85-7-303(1), they must be created and declared in accordance with the following provisions, and on failure of any of them the lien shall not be effective or enforceable:
(a) A substantial compliance by the party claiming the lien with the party's contract for building, repairing or improving; for architectural services furnished; for registered forester services furnished or performed; for registered land surveying or registered professional engineering services furnished or performed; or for materials or machinery furnished or set up, unless prevented by the owner, the owner's agent or another party outside of the claimants' control;
(b) The filing for record of the claim of lien in the office of the clerk of the chancery court where the property is located, within ninety (90) days after the claimant's last addition of labor or materials, the furnishing of the architectural services, or the furnishing or performing of the surveying or engineering services or within ninety (90) days after the material or machinery is furnished. The lien shall include a statement regarding its expiration pursuant to Section 85-7-315 and a notice to the owner of the property on which a claim of lien is filed that the owner has the right to contest the lien; the absence of such statement or notice shall invalidate the lien. The claim shall be in substance as follows:
"A.B., a mechanic, contractor, subcontractor, materialman, machinist, manufacturer, registered architect, registered forester, registered land surveyor, registered professional engineer, or other person (as the case may be) claims a lien in the amount of (specify the amount claimed) on the house, factory, mill, machinery, or railroad (as the case may be) and the premises or real estate on which it is erected or built, of C.D. (describing the houses, premises, real estate, or railroad), for satisfaction of a claim which became due on (specify the date the claim was due, which is the same as the last date the labor, services, or materials were supplied to the premises) for building, repairing, improving, or furnishing material (or whatever the claim may be).
THIS CLAIM OF LIEN EXPIRES AND IS VOID THREE HUNDRED NINETY-FIVE (395) DAYS FROM THE DATE OF FILING OF THE CLAIM OF LIEN IF NO NOTICE OF COMMENCEMENT OF LIEN ACTION IS FILED IN THAT TIME PERIOD. NOTICE TO OWNER OF PROPERTY: You have the right to contest this claim of lien pursuant to Mississippi Law."
No later than two (2) business days after the date the claim of lien is filed of record, the lien claimant shall send a true and accurate copy of the claim of lien by registered or certified mail or statutory overnight delivery to the owner of the property or, if the owner's address cannot be found, the contractor, as the agent of the owner; if the property owner is an entity on file with the Secretary of State's office, sending a copy of the claim of lien to the entity's address or the registered agent's address shall satisfy this requirement. If the lien claimant is not the contractor, he shall also send a copy of the claim of lien within two (2) business days by registered or certified mail or any means creating a written positive acceptance to the contractor or to the contractor's registered agent.
(c) The commencement of a lien action for the recovery of the amount of the party's claim against the party he contracted with in county, circuit or chancery court within three hundred sixty-five (365) days from the date of filing for record of his or her claim of lien. In addition, within thirty (30) days after commencing a lien action, the party claiming the lien shall file a notice with the clerk of the chancery court of the county wherein the subject lien was filed, and, in addition, send a copy thereof by any means providing a written positive acceptance thereof to the owner and, if not previously notified in writing of the suit, to the general contractor, or the registered agent of either. The notice shall contain a caption referring to the then owner of the property against which the lien was filed and referring to a deed or other recorded instrument in the chain of title of the affected property. The notice shall be executed, under oath, by the party claiming the lien or by that party's attorney of record, but failure to execute the notice under oath shall be an amendable defect which may be cured by the party claiming the lien or by the party's attorney without leave of court at any time before entry of the pretrial order and thereafter by leave of court. An amendment of notice pursuant to this section shall relate back to the date of filing of the notice. The notice shall identify the court or arbitration venue wherein the lien action is brought; the style and number, if any, of the lien action, including the names of all parties thereto; the date of the filing of the lien action; and the book and page number of the records of the county where the subject lien is recorded in the same manner in which liens specified in Section 85-7-303 are filed. The clerk of the chancery court shall enter on the subject lien the book and page on which the notice is recorded and shall index the notice in the name of the then-purported owner as shown by the caption contained in the notice. A separate lis pendens notice need not be filed with the commencement of this action; and
(d) (i) In the event any design professional, contractor or subcontractor procuring material, architect's services, registered forester's services, registered land surveyor's services, or registered professional engineer's services, labor, or supplies for the building, repairing, or improving of any real estate, building, or other structure shall abscond or die or leave the state during the required time period for filing a lien action, so that personal jurisdiction cannot be obtained on the contractor or subcontractor in a lien action for the services, material, labor, or supplies, or if the contractor or subcontractor shall be adjudicated a bankrupt, or if, after the filing of a lien action, no final judgment can be obtained against him or her for the value of such material, services, labor, or supplies because of his or her death, adjudication in bankruptcy, or the contract between the party claiming the lien and the contractor or subcontractor includes a provision preventing payment to the claimant until after the contractor or the subcontractor has received payment, then and in any of these events, the person or persons furnishing material, services, labor, and supplies shall be relieved of the necessity of filing a lien action or obtaining judgment against the contractor or subcontractor as a prerequisite to enforcing a lien against the property improved by the contractor or subcontractor.
(ii) Subject to Section 85-7-303, the person or persons furnishing material, services, labor, and supplies may enforce the lien directly against the improved property in a lien action against the owner thereof, if filed within the required time period for filing a lien action, with the judgment rendered in any such proceeding to be limited to a judgment in rem against the property improved and to impose no personal liability upon the owner of the property; however, in a lien action for recovery, the owner of the improved real estate, who has paid the agreed price or any part of the agreed price, may set up the payment in any lien action brought and prove by competent and relevant evidence that the payments were applied as provided by law, and no judgment shall be rendered against the improved property.
(iii) Within thirty (30) days after filing a lien action, the party claiming the lien shall file a notice with the clerk of the chancery court of the county where the lien was filed. The notice shall contain a caption referring to the then-owner of the property against which the lien was filed and referring to a deed or other recorded instrument in the chain of title of the affected property. The notice shall be executed, under oath, by the party claiming the lien or by his or her attorney of record. The notice shall identify the court or arbitration venue wherein the lien action is brought; the style and number of the lien action, if any, including the names of all parties; the date of the filing of the lien action; and the book and page number of the records of the county where the subject lien is recorded in the same manner in which liens specified in Section 85-7-303 are filed.
(iv) The clerk of the chancery court shall enter on the subject lien the book and page on which the notice is recorded and shall index the notice in the name of the then-purported owner as shown by the caption contained in the notice.
(v) A separate lis pendens notice need not be filed with the commencement of this action.
(e) A claim of lien may be amended at any time to reduce the amount claimed, and the amended claim of lien shall relate back to the date of filing for record of the original claim of lien. An amended claim of lien filed for record pursuant to this subsection shall be sent to the owner of the property in the same manner as required for a claim of lien in subsection (1)(b) of this section and shall be in substance as follows:
"That certain claim of lien filed by A.B. against property of C.D. on (date) and recorded at book (book#), page (page#) in the lien index of (name of county) County is hereby amended by reducing the amount of such claim of lien to (specify reduced amount claimed). The remaining terms of such original claim of lien are hereby incorporated by reference into this amended claim of lien. This amended claim of lien relates back to the date that such original claim of lien was filed for record."
(2) (a) The liens specified in Section 85-7-303 shall be inferior to liens for taxes, to the general and special liens of laborers, to the general lien of landlords of rent when a distress warrant is issued out and levied, and to other general liens when actual notice of the general lien of landlords and others has been communicated before the work was done or materials or services furnished; but the liens provided for in Section 85-7-303 shall be superior to all other liens not excepted by this subsection.
(b) A lien as to the land and buildings or improvements thereon, shall have priority over all other liens, deeds of trust, mortgages or encumbrances created subsequent to the commencement of work on the building or improvement. All liens, deeds of trust, mortgages and encumbrances, created prior to the commencement of such work shall have priority over all liens for such work. Enforcement of such lien of a mechanic, materialman or other person created by Section 85-7-303 shall not affect any prior deeds of trust or other lien, and the purchaser in connection with the enforcement of such construction lien created by Section 85-7-303 shall take the property subject to any prior liens, deeds of trust, mortgages or encumbrances of which the purchaser has actual or constructive notice on the date of the purchase. Foreclosure of any prior deeds of trust or other lien shall terminate and extinguish such subordinate construction lien or other interest as to the land and the buildings and improvements thereon, whether or not at the time of the foreclosure the lien or interest has been perfected in accordance with the provisions of this article, and the mechanic, materialman or other person thereafter shall have, to the extent of his lawful claim under this article, the statutory right of redemption afforded under applicable redemption laws to a judgment creditor whose judgment was recorded on the date such work was commenced and such rights in any excess proceeds received by the foreclosing lienholder as provided by law.
(3) (a) Following compliance with the requirements set forth in subsection (1) of this section in any proceeding against the owner brought by any materialman, by any mechanic, by any laborer, by any subcontractor, by any professional engineer, or by any mechanic of any sort employed by any subcontractor or by any materialmen furnishing material to any subcontractor, or by any laborer furnishing labor to any subcontractor, to enforce a lien against the property, the contractor or design professional having a direct contractual relationship with the subcontractor or professional engineer shall not be a necessary party, but may be made a party. In any proceedings brought by any mechanic employed by any subcontractor, by any materialmen furnishing material to any subcontractor, or by any laborer furnishing labor to any subcontractor, the subcontractor shall not be a necessary party, but may be made a party. The design professional, contractor or subcontractor, or all of them, may intervene in the proceedings at any time before judgment for the purpose of resisting the establishment of the lien or of asserting against the lienor any claim of the contractor or subcontractor growing out of or related to the transaction upon which the asserted lien is based.
(b) Any defendant to an action against the owner to enforce a lien against the property, by appropriate plea, may put in issue the fact of indebtedness or the existence of the lien, or both, and may interpose any other defense or join any counterclaim applicable to the action; and if the court by its finding, or the jury by their verdict, as the case may be, ascertain that the plaintiff has a lien as claimed, judgment shall be entered for the amount secured thereby, interest and costs, against the party liable for the same.
(c) The court, in its discretion, may award reasonable costs, interest, litigation expenses and attorney's fees to the prevailing party in an action against the owner to enforce a lien against the property.
(d) All liens arising under Section 85-7-303, except in favor of the original contractor, design professional or surveyor, shall stand on an equal footing, and be first paid out of the proceeds of the sale of the property, or money collected from the owner; and if the proceeds and money are insufficient to satisfy the liens in full, the same shall be distributed pro rata among the claimants thereof.
(4) In no event shall the aggregate amount of liens set up by Section 85-7-303 exceed the contract price of the improvements made or services performed.
(5) The filing fees for a claim of materialman's or mechanic's lien and any related document created pursuant to this section, including, but not limited to, a notice of commencement of action, shall be the amount set for liens on real estate and personal property.
SECTION 4. The following shall be codified as Section 85-7-307, Mississippi Code of 1972:
85-7-307. (1) The contractor shall, when so requested in writing by the owner, the receipt of which can be shown by positive acceptance, furnish to the owner or proprietor a complete list of all subcontractors and materialmen. If the contractor willfully fails or refuses to furnish the list or to give the information to the owner within a reasonable time, or fails to pay any materialman or subcontractor in direct privity with him in accordance with any contract made with the owner or proprietor specifically requiring him to do so, he shall thereby forfeit his right to a lien under this article.
(2) When a claimant is requested to execute a waiver and release in exchange for or to induce the making of an interim or final payment, in accordance with Section 85-7-319(3) or (4), and does so, and the owner is induced thereby to make the payment to the design professional, contractor or subcontractor, as the case may be, and the design professional, contractor or subcontractor, without good cause, willfully fails or refuses to pay the claimant the amount claimed as set forth in the waiver and release, then the design professional, contractor or subcontractor, as the case may be, shall be liable to the claimant in the amount of three (3) times the amount claimed on the face of the waiver and release.
(3) The provisions of this section do not apply to single family residential construction.
SECTION 5. The following shall be codified as Section 85-7-309, Mississippi Code of 1972:
85-7-309. (1) As to single family residential construction only, payment made by or on behalf of the owner to a contractor or design professional in privity with the owner, for the work of a subcontractor, materialman, professional engineer or professional surveyor shall be an absolute defense to any claim of lien made by the subcontractor, materialman, professional engineer or professional surveyor, (a) but only to the extent of the payment actually made by or on behalf of the owner to the contractor or design professional in privity with the owner, and (b) only to the extent the owner has not received a pre-lien notice in accordance with subsection (2) of this section before the payment.
(2) As to single family residential construction only, as a condition precedent of any right to a special lien under Section 85-7-303 in favor of a subcontractor, materialman, design professional, professional engineer or professional surveyor in privity with the owner, the claimant must provide the owner a pre-lien written notice at least ten (10) days before filing a claim of lien under Section 85-7-305.
SECTION 6. The following shall be codified as Section 85-7-311, Mississippi Code of 1972:
85-7-311. (1) (a) When the building or improvement is erected under or by virtue of any contract with a lessee in possession, and the erection thereof is not in violation of the terms or conditions of the lease, the lien shall attach to such building or improvement, and to the unexpired term of the lease, and the holder of the lien shall have the right to avoid a forfeiture of the lease by paying rent to the lessor, as it becomes due and payable, or by the performance of any other act or duty to which the lessee may be bound.
(b) If the lien can be enforced by a sale of the building or improvement, the purchaser may, at his election, (i) become entitled to the possession of the demised premises, and to remain therein for the unexpired term, by paying rent to the lessor, or performing any other act or duty to which the lessee was bound, as if he were the assignee of the lease; or (ii) he may, within sixty (60) days after the sale, remove the building or improvement from the premises, but only to the extent that it is detachable from the real property without injury to the real property; and if he elects to take possession and to remain therein until the expiration of the term of the lease, he may, within a reasonable time after the expiration of the term, remove the building or improvement from the premises, but only to the extent that it is detachable from the real property without injury to the real property.
(c) If, before a sale, the holder of the lien has made any payments of rent, or other pecuniary compensation to the lessor, which ought to have been paid by the lessee, he shall be reimbursed for the payments from the proceeds of the sale.
(2) When a lien attaches under subsection (1) of this section, the lessor, at any time before a sale of the property, shall have a right to discharge the lien by paying to the holder the amount secured thereby, including costs and all monies he may have paid to the lessor to prevent a forfeiture of the lease, and, after a sale, he shall have the right to prevent the removal of the building or improvement from the premises by paying to the purchaser the value of the building or improvement; and upon the payment, either to the holder of the lien or to the purchaser, the building or improvement shall become the property of the lessor.
(3) Notwithstanding subsections (1) and (2) of this section unless done by the written consent of the owner, only the building or improvements erected, and then only to the extent that they are detachable from the real property without injury to the real property, as well as the estate of the tenant in the land, shall be subject to such lien.
SECTION 7. The following shall be codified as Section 85-7-313, Mississippi Code of 1972:
85-7-313. (1) The special lien specified in (1) of Section 85-7-303(1) shall be dissolved if the owner, purchaser from owner, or lender providing construction or purchase money or any other loan secured by real estate shows that:
(a) The lien has been waived in writing by lien claimant; or
(b) (i) They or any of them have obtained the sworn written statement of the contractor or person other than the owner at whose instance the labor, services, or materials were furnished, or the owner when conveying title in a bona fide sale or loan transaction, that the agreed price or reasonable value of the labor, services, or materials has been paid or waived in writing by the lien claimant; and
(ii) When the sworn written statement was obtained or given as a part of a transaction:
1. Involving a conveyance of title in a bona fide sale;
2. Involving a loan in which the real estate is to secure repayment of the loan; or
3. Where final disbursement of the contract price is made by the owner to the contractor, there was not of record, at the time of the settlement of the transaction, a valid claim of lien which had not been previously canceled, dissolved, or expired.
(2) As used in this section, the term:
(a) "Person other than the owner" shall not include a subcontractor.
(b) "Final disbursement" of the contract price means payment of the agreed price between the owner and contractor for the improvements made upon the real estate or the reasonable value of the labor, services, and materials incorporated in the improvements upon the real estate and shall include payment of the balance of the contract price to an escrow agent.
(3) If the sworn written statement, as required by subsection (1)(b)(i) of this section, is willfully and falsely made, then all parties injured thereby shall have a right of action against the maker of said sworn written statement for damages in the amount of three (3) times their actual damages sustained on account of such willfully and falsely made sworn written statement.
SECTION 8. The following shall be codified as Section 85-7-315, Mississippi Code of 1972:
85-7-315. (1) When any person entitled under this article to claim a lien against any real estate located in this state files a lien in the office of the clerk of the chancery court of the county in which the real estate is located, the owner of the real estate or the contractor employed to improve the property may, before or after foreclosure proceedings are instituted, discharge the lien upon the approval of a bond by the clerk of the chancery court. The bond shall be conditioned to pay to the holder of the lien the sum that may be found to be due the holder upon the trial of any lien action that may be filed by the lienholder to recover the amount of the claim within three hundred sixty-five (365) days from the time the claim of lien is filed. The bond shall be one hundred ten percent (110%) of the amount claimed under that lien and shall be either a bond with good security approved by the clerk of the chancery court or a cash bond. An owner or contractor may be required to provide supporting data to the clerk to prove the value of domiciled property when the property serves as a bond to discharge a lien provided for in this section. Upon the approval by the clerk of the bond provided for in this section, the real estate shall be discharged from the lien. For purposes of this subsection, the term "domicile" means the established, fixed, permanent, or ordinary dwelling place of the owner.
(2) Within seven (7) days of filing the bond required by subsection (1) of this section and any attachments, the party filing the bond shall send a notice of filing the bond and a copy of the bond by registered or certified mail or statutory overnight delivery to the lien claimant at the address stated on the lien or, if no address is shown for the lien claimant, to the person shown as having filed the lien on behalf of the claimant at the indicated address of the person or, if the bond is filed by a contractor, to the owner of the property; however, if the lien claimant or the owner is an entity on file with the Secretary of State's office, sending the notice of filing the bond and a copy of the bond to the company's address or the registered agent's address on file with the Secretary of State shall be deemed sufficient; failure to send the notice of filing the bond and copy of the bond shall not invalidate the bond for purposes of discharge of a claim of lien under this section. With respect to property bonds, the clerk shall not accept any real property bond unless the real property is scheduled in an affidavit attached thereto setting forth a description of the property and indicating the record owner thereof, including any liens and encumbrances and amounts thereof, the market value, and the value of the sureties' interest therein, which affidavit shall be executed by the owner or owners of the interest; the bond and affidavit shall be recorded in the same manner and at the same cost as other deeds of real property. So long as the bond exists, it shall constitute a lien against the property described in the attached affidavit.
(3) The clerk of the chancery court shall have the right to rely upon the amount specified in the claim of lien in determining the sufficiency of any bond to discharge under this section. The failure to specify both the amount claimed due under the lien and the date the claim was due shall result in such lien not constituting notice for any purposes.
(4) The clerk of the chancery court shall be held harmless for good faith regarding any discretionary act in connection with approval of any bond provided for in this section.
SECTION 9. The following shall be codified as SEction 85-7-317, Mississippi Code of 1972:
85-7-317. If services are performed or furnished with respect to any real estate by any registered architect, registered forester, registered land surveyor, or registered professional engineer who is a member of a partnership or who is an agent or employee of a corporation or an association and the contract for the services is made for or on behalf of the owner with the partnership or corporation or association, the partnership, corporation, or association shall be entitled to all the privileges and benefits of Section 85-7-303, just as if the partnership, corporation, or association was a registered architect, a registered forester, a registered professional engineer, or a registered land surveyor.
SECTION 10. The following shall be codified as Section 85-7-319, Mississippi Code of 1972:
85-7-319. (1) A right to claim a lien or to claim upon a bond may not be waived in advance of furnishing of labor, services, or materials. Any purported waiver or release of lien or bond claim or of this section executed or made in advance of furnishing of labor, services, or materials is null, void, and unenforceable.
(2) No oral or written statement by the claimant purporting to waive, release, impair, or otherwise adversely affect a lien or bond claim is enforceable or creates an estoppel or impairment of claim of lien or claim upon a bond unless:
(a) It is pursuant to a waiver and release form duly executed by claimant prescribed below; and
(b) The claimant has received payment for the claim as set forth in subsection (6) of this section.
(3) When a claimant is requested to execute a waiver and release in exchange for or in order to induce payment other than final payment, the waiver and release shall substantially follow the following form, in boldface capital letters in at least 12 point font and the priority of such claimant's lien rights, except as to retention, shall upon such payment thereafter run from the day after the date specified in such Interim Waiver and Release upon Payment form:
INTERIM WAIVER AND RELEASE UPON PAYMENT
STATE OF MISSISSIPPI
COUNTY OF __________
THE UNDERSIGNED MECHANIC AND/OR MATERIALMAN HAS BEEN EMPLOYED BY _______________ (NAME OF CONTRACTOR) TO FURNISH _______________ (DESCRIBE MATERIALS AND/OR LABOR) FOR THE CONSTRUCTION OF IMPROVEMENTS KNOWN AS _________________ (TITLE OF THE PROJECT OR BUILDING) WHICH IS LOCATED IN THE CITY OF ______________, COUNTY OF ______________, AND IS OWNED BY _______________ (NAME OF OWNER) AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
__________________________________________________________
__________________________________________________________
__________________________________________________________
(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY USING EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT, BLOCK AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)
UPON THE RECEIPT OF THE SUM OF $_____________, THE MECHANIC AND/OR MATERIALMAN WAIVES AND RELEASES ANY AND ALL LIENS OR CLAIMS OF LIENS IT HAS UPON THE FOREGOING DESCRIBED PROPERTY OR ANY RIGHTS AGAINST ANY LABOR AND/OR MATERIAL BOND THROUGH THE DATE OF _____________ (DATE) AND EXCEPTING THOSE RIGHTS AND LIENS THAT THE MECHANIC AND/OR MATERIALMAN MIGHT HAVE IN ANY RETAINED AMOUNTS, ON ACCOUNT OF LABOR OR MATERIALS, OR BOTH, FURNISHED BY THE UNDERSIGNED TO OR ON ACCOUNT OF SAID CONTRACTOR FOR SAID BUILDING OR PREMISES.
GIVEN UNDER HAND AND SEAL THIS THE __________ DAY OF __________, ___________.
_______________________ (SEAL)
_______________________
_______________________
(WITNESS)
_______________________
(ADDRESS)
NOTICE: WHEN YOU EXECUTE AND SUBMIT THIS DOCUMENT, YOU SHALL BE CONCLUSIVELY DEEMED TO HAVE BEEN PAID IN FULL THE AMOUNT STATED ABOVE, EVEN IF YOU HAVE NOT ACTUALLY RECEIVED SUCH PAYMENT, 60 DAYS AFTER THE DATE STATED ABOVE UNLESS YOU FILE EITHER AN AFFIDAVIT OF NONPAYMENT OR A CLAIM OF LIEN PRIOR TO THE EXPIRATION OF SUCH 60 DAY PERIOD. THE FAILURE TO INCLUDE THIS NOTICE LANGUAGE ON THE FACE OF THE FORM SHALL RENDER THE FORM UNENFORCEABLE AND INVALID AS A WAIVER AND RELEASE UNDER SECTION 85-7-319.
However, the failure to correctly complete any of the blank spaces in the above form shall not invalidate the form if the subject matter of the release may reasonably be determined.
(4) When a claimant is requested to execute a waiver and release in exchange for or in order to induce making of final payment, the waiver and release shall substantially follow the following form in boldface capital letters in at least twelve (12) point font:
WAIVER AND RELEASE UPON FINAL PAYMENT
STATE OF MISSISSIPPI
COUNTY OF __________
THE UNDERSIGNED MECHANIC AND/OR MATERIALMAN HAS BEEN EMPLOYED BY __________ (NAME OF CONTRACTOR) TO FURNISH __________ (DESCRIBE MATERIALS AND/OR LABOR) FOR THE CONSTRUCTION OF IMPROVEMENTS KNOWN AS __________ (TITLE OF THE PROJECT OR BUILDING) WHICH IS LOCATED IN THE CITY OF __________, COUNTY OF __________, AND IS OWNED BY __________ (NAME OF OWNER) AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
_______________________________________________________
_______________________________________________________
_______________________________________________________
(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY USING EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT, BLOCK AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)
UPON THE RECEIPT OF THE SUM OF $__________, THE MECHANIC AND/OR MATERIALMAN WAIVES AND RELEASES ANY AND ALL LIENS OR CLAIMS OF LIENS IT HAS UPON THE FOREGOING DESCRIBED PROPERTY OR ANY RIGHTS AGAINST ANY LABOR AND/OR MATERIAL BOND ON ACCOUNT OF LABOR OR MATERIALS, OR BOTH, FURNISHED BY THE UNDERSIGNED TO OR ON ACCOUNT OF SAID CONTRACTOR FOR SAID PROPERTY.
GIVEN UNDER HAND AND SEAL THIS THE __________ DAY OF _______________, __________.
___________________________ (SEAL)
___________________________
___________________________
(WITNESS)
__________
(ADDRESS)
NOTICE: WHEN YOU EXECUTE AND SUBMIT THIS DOCUMENT, YOU SHALL BE CONCLUSIVELY DEEMED TO HAVE BEEN PAID IN FULL THE AMOUNT STATED ABOVE, EVEN IF YOU HAVE NOT ACTUALLY RECEIVED SUCH PAYMENT, 60 DAYS AFTER THE DATE STATED ABOVE UNLESS YOU FILE EITHER AN AFFIDAVIT OF NONPAYMENT OR A CLAIM OF LIEN PRIOR TO THE EXPIRATION OF SUCH 60 DAY PERIOD. THE FAILURE TO INCLUDE THIS NOTICE LANGUAGE ON THE FACE OF THE FORM SHALL RENDER THE FORM UNENFORCEABLE AND INVALID AS A WAIVER AND RELEASE UNDER SECTION 85-7-319.
However, the failure to correctly complete any of the blank spaces in the above form shall not invalidate the form if the subject matter of said release may reasonably be determined.
(5) Nothing contained in this section shall affect:
(a) The enforceability of any subordination of lien rights by a potential lien claimant to the rights of any other party which may have or acquire an interest in all or any part of the real estate, factories, railroads, or other property for which the potential lien claimant has furnished labor, services, or material, even though the subordination is entered into in advance of furnishing labor, services, or material and even though the claimant has not actually received payment in full for its claim;
(b) The enforceability of any waiver of lien rights given in connection with the settlement of a bona fide dispute concerning the amount due the lien claimant for labor, services, or material which have already been furnished;
(c) The validity of a cancellation or release of a recorded claim of lien or preliminary notice of lien rights; or
(d) The provisions of Section 85-7-313(1)(b) or Section 85-7-315.
(6) (a) When a waiver and release provided for in this section is executed by the claimant, it shall be binding against the claimant for all purposes, subject only to payment in full of the amount set forth in the waiver and release.
(b) Amounts shall conclusively be deemed paid in full upon the earliest to occur of:
(i) Actual receipt of funds;
(ii) Execution by the claimant of a separate written acknowledgment of payment in full; or
(iii) Sixty (60) days after the date of the execution of the waiver and release, unless before the expiration of the 60-day period, the claimant files in the county in which the property is located an affidavit of nonpayment, using substantially the following form in boldface capital letters in at least twelve (12) point font:
AFFIDAVIT OF NONPAYMENT UNDER SECTION 85-7-319
STATE OF MISSISSIPPI
COUNTY OF __________
THE UNDERSIGNED MECHANIC AND/OR MATERIALMAN HAS BEEN EMPLOYED BY __________ (NAME OF CONTRACTOR) TO FURNISH __________ (DESCRIBE MATERIALS AND/OR LABOR) FOR THE CONSTRUCTION OF IMPROVEMENTS KNOWN AS __________ (TITLE OF THE PROJECT OR BUILDING) WHICH IS LOCATED IN THE CITY OF __________, COUNTY OF __________, AND IS OWNED BY __________ (NAME OF OWNER) AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
_________________________________________________________
_________________________________________________________
_________________________________________________________
(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY USING EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT, BLOCK AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)
PURSUANT TO SECTION 85-7-319 THE UNDERSIGNED EXECUTED A LIEN WAIVER AND RELEASE WITH RESPECT TO THIS PROPERTY DATED ______________, ______. THE AMOUNT SET FORTH IN THE WAIVER AND RELEASE ($__________) HAS NOT BEEN PAID, AND THE UNDERSIGNED HEREBY GIVES NOTICE OF SUCH NONPAYMENT.
THE ABOVE FACTS ARE SWORN TRUE AND CORRECT BY THE UNDERSIGNED, THIS THE __________ DAY OF ______________, _____.
CLAIMANT'S SIGNATURE (SEAL)
SWORN TO AND EXECUTED
IN THE PRESENCE OF:
______________________________
WITNESS
______________________________
NOTARY PUBLIC
WITHIN SEVEN DAYS OF FILING THIS AFFIDAVIT OF NONPAYMENT, THE FILING PARTY SHALL SEND A COPY OF THE AFFIDAVIT BY REGISTERED OR CERTIFIED MAIL OR STATUTORY OVERNIGHT DELIVERY TO THE OWNER OF THE PROPERTY. WHENEVER THE OWNER OF THE PROPERTY IS AN ENTITY ON FILE WITH THE SECRETARY OF STATE'S OFFICE, SENDING A COPY OF THE LIEN TO THE COMPANY'S ADDRESS OR THE REGISTERED AGENT'S ADDRESS ON FILE WITH THE SECRETARY OF STATE SHALL BE DEEMED SUFFICIENT.
(c) A claimant who is paid, in full, the amount set forth in the waiver and release form after filing an affidavit of nonpayment shall upon request execute in recordable form an affidavit swearing that payment in full has been received. Upon recordation thereof in the county in which the Affidavit of Nonpayment was recorded, the affidavit of nonpayment to which it relates shall be deemed void.
(d) Nothing in this code section shall shorten the time within which to file a claim of lien.
(e) A waiver and release provided in this section shall be suspended upon filing of an affidavit of nonpayment until payment in full has been received.
(f) The claimant may rely upon the information contained in the waiver and release form when completing for filing the affidavit of nonpayment or claim of lien.
SECTION 11. The following shall be codified as Section 87-5-321, Mississippi Code of 1972:
87-5-321. (1) Failure of a lien claimant to commence a lien action to collect the amount of his or her claim within three hundred sixty-five (365) days from the date of filing the lien, or failure of the lien claimant to file the statutory notice of commencement of lien action in the county where the property is located, renders the claim of lien unenforceable. A claim of lien may be disregarded if no notice of commencement of lien action was filed within three hundred ninety-five (395) days from the date the claim of lien was filed. Any lien filed shall include on the face of the lien the following statement in at least 12 point bold font: "THIS CLAIM OF LIEN EXPIRES AND IS VOID 395 DAYS FROM THE DATE OF FILING OF THE CLAIM OF LIEN IF NO NOTICE OF COMMENCEMENT OF LIEN ACTION IS FILED IN THAT TIME PERIOD." Failure to include the required language shall invalidate the lien and prevent it from being filed. No release or voiding of such liens shall be required. A lien shall expire sooner and be disregarded once it is determined that no notice of commencement was timely filed in response to a notice of contest pursuant to Section 85-7-323.
(2) Whenever any such lien has been fully satisfied, the holder thereof must file a cancellation of the same in the record in the office of the chancery clerk.
(3) Any holder of a lien, who, after having been fully paid fails for thirty (30) days after demand in writing to so file a cancellation as provided in subsection (1) of this section shall be liable to any person thereby injured to the amount of the injury, which shall not be less than Five Hundred Dollars ($500.00) plus reasonable attorney's fees and costs.
SECTION 12. The following shall be codified as Section 85-7-323, Mississippi Code of 1972:
85-7-323. (1) An owner or an owner's agent or attorney, or the contractor or contractor's agent or attorney, may elect to shorten the time prescribed in which to commence a lien action to enforce any claim of lien by recording in the chancery clerk's office a notice in substantially the following form, in boldface capital letters in at least 12 point font, along with proof of delivery upon the lien claimant:
NOTICE OF CONTEST OF LIEN
TO: [NAME AND ADDRESS OF LIEN CLAIMANT]
YOU ARE NOTIFIED THAT THE UNDERSIGNED CONTESTS THE CLAIM OF LIEN FILED BY YOU ON __________, 20___, AND RECORDED IN __________ BOOK __________, PAGE __________ OF THE PUBLIC RECORDS OF __________ COUNTY, MISSISSIPPI, AGAINST PROPERTY OWNED BY __________, AND THAT THE TIME WITHIN WHICH YOU MAY COMMENCE A LIEN ACTION TO ENFORCE YOUR LIEN IS LIMITED TO 60 DAYS FROM RECEIPT OF THIS NOTICE. THIS THE __________ DAY OF __________, 20___.
THIS ABOVE-REFERENCED LIEN WILL EXPIRE AND BE VOID IF YOU DO NOT: (1) COMMENCE A LIEN ACTION FOR RECOVERY OF THE AMOUNT OF THE LIEN CLAIM PURSUANT TO SECTION 85-7-305 WITHIN 60 DAYS FROM RECEIPT OF THIS NOTICE; AND (2) FILE A NOTICE OF COMMENCEMENT OF LIEN ACTION WITHIN 30 DAYS OF FILING THE ABOVE-REFERENCED LIEN ACTION.
SIGNED: ___________________________________________
(OWNER, CONTRACTOR, AGENT OR ATTORNEY)
(2) The clerk of the chancery court shall cross-reference the notice of contest of lien to the lien. The owner or the owner's agent or attorney, or the contractor or the contractor's agent or attorney, shall send a copy of the notice of contest of lien within seven (7) days of filing by registered or certified mail or statutory overnight delivery to the lien claimant at the address noted on the face of the lien. Service shall be deemed complete upon mailing.
(3) The lien shall be extinguished by law ninety (90) days after the filing of the notice of contest of lien if no notice of commencement of lien action is filed in that time period. No release or voiding of such liens shall be required. This subsection shall not be construed to extend the time in which a lien action must begin.
SECTION 13. The following shall be codified as Section 85-7-325, Mississippi Code of 1972:
85-7-325. For the purposes of this article, the computation of time shall be determined pursuant to Section 1-3-67.
SECTION 14. The following shall be codified as Section 85-7-327, Mississippi Code of 1972:
85-7-327. (1) Judgments establishing the lien, and ordering the property sold for the satisfaction thereof, may be enforced by special writ of execution as set forth in Section 85-7-153.
(2) The delivery of possession by the person claiming the lien shall not affect his lien.
SECTION 15. The following shall be codified as Section 85-7-329, Mississippi Code of 1972:
85-7-329. (1) Any person who shall falsely and knowingly file the statement provided in this act without just cause shall be liable to every party injured thereby for a penalty equal to two (2) times the full amount for which the claim was filed, to be recovered in an action by any party so injured at any time within six (6) months from such filing.
(2) Any person whose rights may be adversely affected by wrongful filing of a statement or claim of lien, as provided by this act may, in addition to the remedies set forth in subsection (1) of this section, apply, upon seven (7) days' notice, to the circuit, county or chancery court, to expunge or vacate said statement, in accordance with Rule 81(d)(2) of the Mississippi Rules of Civil Procedure.
SECTION 16. Section 85-7-131, Mississippi Code of 1972, is amended as follows:
85-7-131. * * * As to oil and gas wells, the operator
thereof shall have such a lien upon the interest of each nonoperator owner of
an interest in the mineral leasehold estate for such nonoperator's
proportionate part of such labor, material and services rendered by the
operator or for the operator's account * * * on behalf of each nonoperator in the
drilling, completion, recompletion, reworking or other operations of such oil
and gas well. If such house, building, structure, or fixture be in a city,
town or village, the lien shall extend to and cover the entire lot of land on
which it stands and the entire curtilage thereto belonging; or, if not in a
city, town or village, the lien shall extend to and cover one (1) acre of land
on which the same may stand, if there be so much, to be selected by the holder
of the lien. If the structure be a water well, the lien shall extend only to
all pumps, pipes, equipment therein and all water well appurtenances. If the
structure be an oil or gas well, the lien shall extend to the nonoperator's
interest in the mineral estate and the fixtures and equipment in the producing
unit assigned such well by the State Oil and Gas Board. If the structure be a
railroad or railroad embankment, the lien shall extend to and cover the entire
roadbed and right-of-way, depots and other buildings used or connected
therewith. If the services of the architect, surveyor, engineer, laborers,
materialmen, rental or lease equipment suppliers or of the contractors shall be
upon the whole subdivision, the lien shall extend to and cover the entire
subdivision; but if a part only of the land is subdivided and laborers',
materialmen's, rental or lease equipment suppliers', architects', surveyors' or
engineers' services are required and contractors are employed, then the lien
shall extend to only that portion of said property upon which the services were
required or upon which or in connection with which the work was done or the
materials or rental or lease equipment were furnished. Such lien shall take
effect as to purchasers or encumbrancers for a valuable consideration without
notice thereof, only from the time of commencing suit to enforce the lien, or
from the time of filing the contract under which the lien arose, or notice
thereof, in the office of the clerk of the chancery court, as hereinafter
stated; delivery of material to the job is prima facie evidence of its use
therein, and use of water from a water well is prima facie evidence of
acceptability of the well. In the case of oil and gas wells, such lien shall
take effect as to purchasers or encumbrancers for a valuable consideration
without notice thereof, only from the time of filing notice of such lien as
provided by Section 85-7-133.
SECTION 17. Section 85-7-133, Mississippi Code of 1972, is amended as follows:
85-7-133. Each of the
several chancery clerks of this state shall provide in his office, as a part of
the land records of his county, a record entitled "Notice of * * *
Oil and Gas
Liens" wherein notices under Section 85-7-131 shall be filed and recorded,
and such liens, as provided hereunder, shall not take effect unless and until
some notation thereof shall be filed and recorded in said record showing a
description of the property involved, the name of the lienor or lienors, the
date of filing, if and where suit is filed, and if and where contract is filed
or recorded.
SECTION 18. Sections 85-7-181, 85-7-183, 85-7-185, 85-7-197, 85-7-199, 85-7-201, 85-7-137 and 85-7-139, which provide for liens on amounts due a contractor and the filing thereof, are repealed.
SECTION 19. This act shall take effect and be in force from and after its passage.
