MISSISSIPPI LEGISLATURE

2019 Regular Session

To: Judiciary A

By: Representative Snowden

House Bill 813

AN ACT TO AMEND SECTIONS 85-7-415 AND 85-7-521, MISSISSIPPI CODE OF 1972, TO REQUIRE THAT WHENEVER REAL ESTATE IS SUBJECT TO A LIEN AND THE PROPERTY OWNER FILES A BOND WITH THE CHANCERY CLERK OF THE COUNTY IN WHICH THE REAL ESTATE IS LOCATED, THE CLERK SHALL DESIGNATE THE LIEN, AND ANY LIS PENDENS, AS CANCELLED UPON THE FACE OF THE RECORD AS EVIDENCE OF THE LIEN'S DISCHARGE; AND FOR RELATED PURPOSES.

     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

     SECTION 1.  Section 85-7-415, Mississippi Code of 1972, is amended as follows:

     85-7-415.  (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 or subcontractor 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 payment action that may be filed by the lienholder to recover the amount of the claim within one hundred eighty (180) days from the time the claim of lien is filed or as otherwise required by Section 85-7-423.  The bond shall be one hundred ten percent (110%) of the amount claimed under that lien and shall be either a cash bond or a bond with good security approved by the clerk of the chancery court and issued by any surety company authorized to do business in the State of Mississippi.  Upon approval by the clerk of the bond, the real estate shall be discharged from the lien and the clerk shall designate the lien, and any lis pendens, as cancelled upon the face of the record as evidence of the lien's discharge.

     (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 and, if the bond is filed by a contractor or subcontractor, to the owner of the property and the contractor; however, if the lien claimant or the owner or contractor 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 bonds secured by property, the clerk shall not accept any real property bond unless the real property is scheduled in an attached affidavit 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 the 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 2.  Section 85-7-521, Mississippi Code of 1972, is amended as follows:

     85-7-521.  Unless an alternative procedure is available and is acceptable to the transferee in a real estate transaction, any claim of lien on commercial real estate filed under this article may be discharged by any of the following methods:

          (a)  The lien claimant of record, the claimant's lawful agent, or the claimant's duly authorized attorney-in-fact, in the presence of the chancery clerk or a notary public, may acknowledge in writing the satisfaction of the claim of lien on the commercial real estate indebtedness and file the same with the chancery clerk, after which the chancery clerk shall enter on the record of the claim of lien on the commercial real estate the acknowledgment of satisfaction.

          (b)  The owner may exhibit an instrument of satisfaction signed and acknowledged by the lien claimant of record in the presence of the chancery clerk or a notary public, which instrument states that the claim of lien on the commercial real estate indebtedness has been paid or satisfied, after which the chancery clerk shall cancel the claim of lien on the commercial real estate by entry of satisfaction on the record of the claim of lien on the commercial real estate.

          (c)  By failure to enforce the claim of lien on the commercial real estate within the time prescribed by this article.

          (d)  By filing in the office of the chancery clerk the original or attested copy of a judgment or decree of a court of competent jurisdiction showing that the action by the claimant to enforce the claim of lien on the commercial real estate has been dismissed or finally determined adversely to the claimant.

          (e)  Whenever funds in an amount equal to one hundred twenty-five percent (125%) of the amount of the claim of lien on the commercial real estate are deposited with the chancery clerk to be applied to any payment finally determined to be due, * * *after which the chancery clerk shall * * * cancel the claim of lien on the commercial real estate then designate the lien, and any lis pendens, as cancelled upon the face of the record as evidence of the lien's discharge.  Thereafter, the lien of the claimant shall remain in place and be fully enforceable as to the funds deposited with the chancery clerk, but the lien upon the commercial real property shall be deemed released.

          (f)  Whenever a corporate surety bond, in an amount equal to one hundred twenty-five percent (125%) of the amount of the claim of lien on the commercial real estate and conditioned upon the payment of the amount finally determined to be due in satisfaction of the claim of lien on the commercial real estate is deposited with the chancery clerk, * * *after which the chancery clerk shall * * * cancel the claim of lien on the commercial real estate then designate the lien, and any lis pendens, as cancelled upon the face of the record as evidence of the lien's discharge.  Thereafter, the lien of the claimant shall remain in place and be fully enforceable as to the funds deposited with the chancery clerk, but the lien upon the commercial real property shall be deemed released.

          (g)  By failure to file a written release or satisfaction of a lien when required by this article or to timely file or take other action required by this article.

     SECTION 2.  This act shall take effect and be in force from and after July 1, 2019.