Getting Paid Faster with Liens, Bonds and Contracts (Midwest) - Mississippi Webinar

This blog presented by SunRay Construction Solutions and Lynn Thompson, Attorney, Biggs, Ingram, & Solop, PLLC, will provide essential information about Mississippi’s lien laws and payment bond claims for private projects.

Who Has Lien Rights in Mississippi?

Your ability to file a lien in Mississippi depends on your position in relation to the property owner. Here’s a breakdown:

• Prime Contractors (those who have a direct contract with the owner) have lien rights.

• First-tier Subcontractors (those hired by the prime contractor) have lien rights.

• Second-tier Subcontractors (those hired by a first-tier subcontractor) have lien rights.

• Material Suppliers who provide materials to first-tier subcontractors have lien rights.

• Material Suppliers to second-tier subcontractors do NOT have lien rights.

• Architects, engineers, and land surveyors also have lien rights.  

Understanding your role in the contracting chain is essential, as it determines the steps you need to take to protect your lien rights.

Key Requirements to Preserve Your Lien Rights

If you have lien rights, you must meet specific legal requirements to ensure your claim remains valid. The main requirements include:

1. Timely Notice of Labor or Materials Provided – If you are not the prime contractor, you must give notice to the owner within 30 days of first furnishing labor or materials. This notice must include your name, contact information, a description of the work or materials, and the project details.

2. Proper Licensing – Contractors and subcontractors must be properly licensed in Mississippi. If your contract exceeds $50,000, you need a Certificate of Responsibility from the Mississippi State Board of Contractors. Without this certificate, your contract is void, and you lose your lien rights.

3. Compliance with Contract Terms – You must be in substantial compliance with your contract. Failure to perform according to contract terms, deliver materials on time, or meet quality standards can result in the loss of your lien rights.

4. Prompt Payment to Lower-Tier Contractors – If you fail to pay subcontractors or suppliers properly, you may lose your lien rights.

Filing a Lien in Mississippi

To secure a lien, you must meet strict deadlines:

• A lien must be filed within 90 days of the last date you provided labor or materials.

• The lien must include a legal description of the property, the amount owed, and a description of the work performed or materials supplied.

• Within two business days of filing the lien, you must send a copy to the property owner using registered or certified mail, FedEx, or USPS overnight delivery.

• To enforce a lien, you must file a payment action within 180 days of filing the lien.

Payment Bonds on Private Projects

Mississippi does not allow liens on public property or public projects. Instead, payment bonds protect contractors and suppliers in these cases. To make a claim against a payment bond:

• Subcontractors and suppliers must notify the prime contractor within 90 days of non-payment.

• The claim must be filed within one year of the last labor or material supplied.

• If the claim is not filed within the required timeframe, you lose your right to recover payment from the bond.

Protecting Your Payment Rights

Understanding and following Mississippi’s lien laws can be the difference between getting paid and losing money on a project. Here are a few key takeaways to ensure your rights are protected:

• Always determine if the project is on public or private property before beginning work.

• Know your position in the contracting hierarchy to understand your specific lien requirements.

• Provide timely notices to the owner to secure your lien rights.

• Ensure that all involved parties are properly licensed before signing contracts.

• Keep thorough documentation of labor, materials, and communications related to the project.

• Monitor payment deadlines and take legal action before time runs out.

By staying informed and proactive, you can ensure your business is protected and that you receive fair payment for your work. If you have any questions about Mississippi’s lien laws, consult with a construction attorney to avoid costly mistakes.

Common Questions Mississippi Contractors Ask

1. How long do I have to notify the owner of my lien?

The statute requires that you send the lien notice within two business days. You must send it either by registered or certified mail or by statutory overnight delivery. Many professionals use Federal Express or another documented, trackable delivery service.

2. Does the notice have to be received by the owner within two days, or just mailed within that timeframe?

As long as the notice is mailed within the two-business-day window, it complies with the statute. It does not need to be received within that timeframe, only sent.

3. Do design professionals hired by the property owner have lien rights even though they do not provide actual materials or labor?

Yes, they do. Although this discussion primarily focuses on the construction process, professional architectural and engineering services, as well as land surveyors providing surveying services, also have lien rights under Mississippi law. Typically, their contractual relationship is with the property owner.

4. Do design professionals follow the same lien deadlines as general contractors?

Yes, design professionals must adhere to the same lien deadlines that apply to general contractors.

5. If I am a general contractor (GC) and I have provided the required preliminary notices and filed my lien on time, but I still haven’t been paid and cannot pay my subcontractors, do I lose my lien rights?

Under Mississippi law, the state does recognize “pay-if-paid” or “pay-when-paid” clauses. If you have received payment from the owner but improperly withheld payment from your subcontractors, you could lose your lien rights. However, if your contract specifies that payment is contingent upon receiving funds from the owner, then the inability to pay your subcontractors due to non-payment from the owner does not necessarily result in a loss of lien rights, at least for a reasonable period of time.

6. Does a "pay-when-paid" or "pay-if-paid" clause have to be included in the initial contract, or is it assumed?

Under Mississippi law, such a clause must be explicitly stated in the contract. It must be set forth as a condition precedent and is not presumed. If a contracting party wants to rely on this clause, it must be expressly included in the written agreement.