In the wake of the Fifth Circuit Court of Appeals’ long-awaited ruling in Noatex Corp. v. King Construction of Houston, LLC, Case No. 12-60385 (5th Cir. Oct. 10, 2013), which struck down Mississippi's now-repealed Stop-Notice statute as unconstitutional, the State legislature has revamped and expanded lien rights on construction projects.
Previously, traditional lien rights were limited to parties who directly contracted with the project owner. Other parties performing work and/or providing services in Mississippi were left to rely upon the Stop-Notice statute, which allowed unpaid subcontractors or materialmen to bind money in the hands of a project owner, thereby preventing those funds from being disbursed to the non-paying prime contractor. However, the Stop-Notice statute’s protections were limited, as an owner’s responsibility to bind funds only applied if, and to the extent, funds were still owed to the project’s prime contractor. Under the new statute, Miss. Code Ann. § 85-7-401 et seq., which was signed into law and took effect on April 11, 2014, traditional lien rights have now been extended to now include contractors, registered architects, engineers, surveyors, first and second tier subcontractors, and material suppliers performing work and/or providing services in Mississippi.
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