Notice of Lien-Private Work

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Note: This information is limited in scope and applies only to this document. Please see the general information, all forms memo, and the general information memo for this type of document, for additional information.

Description: Notice of Construction Lien.

Scope: State of Mississippi, Private Works.

Time Constraints: The right to file a Notice of Lien depends on several things

The parties must have been notified of an existance of a claim by the mailing of a Mississippi Pre-Lien Notice to Owner and General Contractor, Private Form.

The parties further must be served with an Affidavit of Nonpayment, especially if a Waiver and Release had been given previously.

After  the Affidavit of Nonpayment has been served upon the parties, the Notice of Lien may be prepared for service.

The method of filing depends on the nature of your relationship with the owner:

                     Prime Contractors, Sub Contractors and Materialmen: Mississippi law only requires notice when a party is requesting the benefit of a Stop Payment Notice.  A Stop Payment Notice allows laborers, subcontractors, or material suppliers of any contractor who have not been paid for their labor, services or materials to "bind" sums due to the contractor in the owner's possession.  A subcontractor, laborer or materialman must give written notice to the owner of the amount due to him in order to claim the benefit of a Stop Payment Notice;

                     Special Note: Normally, only those who have a direct contractual relationship with the owner, his agent, or his representative are afforded the protection of a lien, and, as such, the only protection afforded a lower tier subcontractor or supplier is the Stop Payment Notice, unless you have a written agreement signed by the owner;

                     If you dealt directly with the owner (Prime Contractor): File your Notice of Labor's and Material men’s Lien within 1 year of the date the debt becomes due;

                     If you did not deal directly with the owner (Sub-Contractor Material Supplier): Serve a Stop Notice immediately.

Stop Payment Notice – On October 10, 2013, the United States Court of Appeals for the Fifth Circuit in Noatex Corp. v. King Construction of Houston, 2013 U.S. App. Lexis 20656 (5th Cir. October 10, 2013, held that Mississippi’s Stop Payment Notice statute, Miss. Code Ann. 85-7-181, is an unconstitutional violation of procedural due process.  It remains that only those with a direct contractual relationship with the owner, his agent or representative are afforded the protection of a lien.  The Stop Payment Notice in Lien Writer® has been left in tact pending appeal to the Supreme Court, but it’s use is not recommended.

What to do with a Stop Notice and Claim on Unpaid Funds: Serve the Stop Notice as soon as possible after the date your debt becomes due by certified mail or personal service, and also on the lending institution, if know. The Notice will reserve only unpaid funds due the prime contractor being held by the owner or lending institution, but your lien shall apply from the date of the Stop Notice. In fact, you may want to serve a Stop Notice far in advance of a lien.

Payment Bond: Lien rights automatically transfer to a Payment Bond if one exists. Where a Payment Bond has been provided by a surety, after you have filed your Notice of Labor’s or Material men’s Lien file suit against the sureties within the time frame specified by the bond, or in any case no sooner than 6 months but less than one year after the owner publishes the notice of final settlement or abandonment of the contract. No prior notice is required to the bonding company. Attorney's fees against the owner are mandatory, but Payment Bonds themselves are not.

Perfection: File a Lis Pendens Notice against the property, and file suit anytime after the filing of the Notice of Labor’s and Material men’s Lien and Lis Pendens Notice. The judgment will act as a lien.

The usual remedy is to file to enforce all claims in one suit (see below, Procedures). In any case, we strongly recommend your attorney handle the enforcement actions to perfect your lien claims.

Information Requirements: Program information and information for Exhibits A-D, any additional costs as to legal fees, court costs and interest charges (do not pass these up. Estimate if necessary. In the case of Stop Notices and Bond Claims, the lenders or sureties will reserve only the amount for which you make claim), and the Borough (their equivalent of a County) of the state where the recording will be made.

Form Types: Notice Construction Lien, Affidavit to Notice of Construction Lien, Exhibit’s A-D, if needed, Stop Notice and Claim on Unpaid Funds, if needed, and Recorder's Letter.

Procedures: Prepare your documents using the required information. While you can file your Notice of Construction Lien with Affidavit to Notice of Construction Lien immediately, if there is a lender or surety, serve copies of the Notice of Construction Lien with Affidavit to Notice of Construction Lien and Stop Notice and Claim on Unpaid Funds on the owners, lenders and sureties first. Often this is enough to get immediate payment. If not, file your Notice of Construction Lien with Affidavit to the Notice of Construction Lien immediately and serve upon the owners and general contractors (your customer is optional). At this point you are ready to file suit to enforce all of your claims in one action.

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