As with most states, Mississippi has strict rules and regulations that you must obey if you want your mechanics lien to be valid. There are tight deadlines to meet, for example, and there are also formatting guidelines that must be followed.
Filing a mechanics lien is one of the most effective tools to recover payment from a delinquent client. A mechanics lien gets attached to a property’s records, which warns potential buyers and financiers about outstanding payments related to the property. Owners are, therefore, wary about having a mechanics lien filed against their property, effectively encouraging them to release payments and settle debts.
This guide spells out all the important information that you must keep in mind when filing a mechanics lien in Mississippi. If you want to file your mechanics lien successfully, be sure to always keep track of the important deadlines and avoid committing the common mistakes that most construction participants make.
- Serving a preliminary notice
- How to File a Mechanics Lien in Mississippi: 4 Steps
- Important Deadlines When Filing a Mechanics Lien in Mississippi
- 3 Common Mistakes When Filing a Mechanics Lien in Mississippi
- How can filing a mechanics lien in Mississippi get you paid?
Serving a preliminary notice
Serving the necessary pre-lien notices is the first thing that you should keep in mind whenever you start working on a construction project, especially in states like Mississippi where pre-lien notices are required. These notices are important in securing your lien rights.
Who should file a preliminary notice in Mississippi?
All contractors, subcontractors, and material suppliers who do not have a direct contract with the property owner or the prime contractor must serve a preliminary notice to the owner and the prime contractor.
What information should be included on the preliminary notice in Mississippi?
According to Mississippi code 85-7-407, the following details must be noted on the preliminary notice:
a) The name, address, and telephone number of the person providing labor, services or materials;
b) The name and address of each person at whose instance the labor, services or materials are being furnished;
c) The name of the project and location of the project to which labor, services or materials are provided; and
d) A description of the labor, services or materials being provided and, if known, the contract price or anticipated value of the labor, services or materials to be provided
When should a preliminary notice be served?
The preliminary notice should be filed within 30 days after first furnishing labor or materials to the project. Failing to serve the preliminary notice within this 30-day deadline automatically implies that you are choosing to waive your lien rights.
How should the preliminary notice be served?
The preliminary notice in Mississippi may be-submitted to the property owner or the general contractor, if applicable, by email with a confirmed receipt, registered or certified mail, or statutory overnight delivery.
You may also serve the preliminary notice online using Handle. This way you are secured that all the information required are present on the your preliminary notice and that the document is submitted on time.
Are there other pre-lien notices required in Mississippi?
Yes. Those who are working on single-family residential projects are required to send a Notice of Intent to Lien to the property owner 10 days before filing a mechanics lien in Mississippi.
How to File a Mechanics Lien in Mississippi: 4 Steps
- Prepare the mechanics lien document
- Record the mechanics lien
- Serve a copy of the mechanics lien to the appropriate parties
- Enforce/cancel the mechanics lien
1. Prepare the mechanics lien document
Once you have secured your lien rights by filing the preliminary notice(s) and a payment issue has arisen, the next step is to prepare a proper mechanics lien document. The following information must be present on your mechanics lien:
- The amount you are claiming
- A description of the property
- The date the claim was due, which is the same as the last day of furnishing labor or materials to the project
- The names of the claimant and the property owner
Note that following statement must also be included in the mechanics lien document in at least 12-point bold font:
THIS CLAIM OF LIEN EXPIRES AND IS VOID ONE HUNDRED EIGHTY (180) DAYS FROM THE DATE OF FILING OF THE CLAIM OF LIEN IF A PAYMENT ACTION IS NOT FILED BY THE CLAIMANT WITHIN THAT TIME PERIOD.
NOTICE TO OWNER OF PROPERTY: You have the right to contest this claim of lien pursuant to Mississippi law.
Failure to include the statement above will invalidate the lien.
2. Record the mechanics lien in Mississippi
When you have the mechanics lien all set up, you may now file the mechanics lien.
When should you file the mechanics lien in Mississippi?
The mechanics lien must be filed within 90 days after the last day of furnishing labor and materials. You must keep track of this deadline. Failing to file the mechanics lien in 90 days would forfeit your right to pursue payment via the mechanics lien.
Where and how should you file the mechanics lien in Mississippi?
The mechanics lien must be filed the chancery court where the project is located. You may have the mechanics lien recorded in the court by sending it via email together with the required lien fees, or you may also walk in and personally file it.
Another convenient option is to file the mechanics lien online. Handle can take care of all the necessary forms needed to have your mechanics lien filed successfully, from the preliminary notice to the mechanics lien to the lien release documents.
What are the benefits of filing the mechanics in Mississippi online?
By choosing to file the mechanics lien in Mississippi through Handle, you are ensured that your lien rights are protected from day one and that your mechanics lien is properly and on time. Handle keeps track of all the deadlines and takes responsibility for the accuracy of your mechanics lien.
3. Serve a copy of the mechanics lien to the appropriate parties
This is another very important that you shouldn’t miss: you must serve a copy of the mechanics lien within 2 days after having it recorded. The timing is pretty tight and so this step should be done soon as you record the mechanics lien.
Who should receive a copy of the mechanics lien in Mississippi?
The property owner and the general contractor, if applicable, must receive the copy of the mechanics lien within the 2-day deadline. Keep in mind the following scenarios:
- If the property owner’s address is unknown, you may serve the copy to the contractor, as the agent of the owner.
- If the property owner is listed as an entity on file with the Secretary of State’s office, sending a copy of the mechanics lien to the entity’s address should be good enough.
How should the copy of the mechanics lien be served?
The copy of the mechanics lien in Mississippi must be sent via registered or certified mail or statutory overnight delivery.
You may also serve the copies online through Handle, which would ensure that the copies are served on time and that receipts are saved and kept. Sending the copies of the mechanics lien online lets you focus on more immediate business concerns as Handle takes care of all your lien-related issues.
4. Enforce/cancel the mechanics lien
After recording the mechanics lien and letting the relevant parties know about the payment dispute, there are two possible scenarios: either you get paid or you don’t.
If you don’t get paid, you have 180 days to initiate a foreclosure action against the property. Failing to enforce the mechanics lien within this 180-day time frame would cause the lien to expire, which would effectively invalidate your claim.
If you finally get paid and the property owner requests in writing that you release the mechanics lien, you have 15 days to cancel the lien. The 15-day window starts ticking after the property owner serves you a written request to cancel the mechanics lien, given that you have already been paid in full.
Failing to cancel the mechanics lien upon request could cost you $500 for every day that the required lien cancellation is not timely filed. You may also end up shouldering the attorney fees and lien costs incurred by the property owner.
Important Deadlines When Filing a Mechanics Lien in Mississippi
3 Common Mistakes When Filing a Mechanics Lien in Mississippi
1. Claiming a false amount
You must always be truthful in declaring the amount that you are owed, and you must use your best judgment if the amount you are claiming is not the same as what was initially stated in the contract.
Otherwise, if the lien you filed is ruled to be erroneous, you may have to pay a hefty amount. Mississippi code 85-7-429 states that if you knowingly file a false mechanics lien, you will be penalized to pay three times the full amount for which the claim was filed.
2. Failing to file the lien documents on time
The deadlines for different lien-related documents are strictly enforced in Mississippi, and you must keep track of all of them.
3. Failing to cancel the lien upon request from the owner
Mississippi requires its lien claimants to cancel the mechanics lien after they have been paid and upon receiving a written request from the property owner.
This requirement protects the owner so they can have their property clear of any liens once they have satisfied and settled all the payment. Failing to cancel the lien within 15 days after receiving the request will cost you $500 for every day that you miss the deadline, and it may also cause you to pay for the property owner’s lien-related fees.
How can filing a mechanics lien in Mississippi get you paid?
The mechanics lien is a powerful tool that you should maximize whenever you get involved in a payment dispute. If done properly, filing a mechanics lien could get the court to rule in your favor and obligate the debtor to pay you the amount that you have duly earned.
Because the mechanics lien is attached to the title of the property until it is canceled, most property owners would want to avoid dealing with a mechanics lien. Doing your due diligence in securing your lien rights by submitting the required preliminary notices could sometimes be enough to produce payment.