What Happens After I Record My Lien? - Mississippi Webinar

In this blog, presented by SunRay Construction Solutions, attorney Lynn Thompson of Biggs, Ingram & Solop, PLLC, explains the process of perfecting, enforcing, and cancelling a lien in Mississippi, along with the critical timelines and legal distinctions you need to know.

Perfecting a Claim of Lien in Mississippi

• Record lien on time in county land records

• Include all required info

• Send copy to owner/contractor by certified mail or overnight delivery

A lien is not considered perfected simply by filing it. For the lien to be perfected, the following must occur:

• The lien must be timely recorded in the Chancery Clerk’s land records of the appropriate county.

• It must contain all required statutory information.

• A copy of the lien must be sent to the owner and/or contractor by certified mail or statutory overnight delivery.

Only once these steps are completed does the lien become perfected, and the countdown for enforcement begins.

Payment Action vs. Lien Action

After perfecting a lien, claimants must determine which legal action to pursue:

• Payment Action: Filed against the party who owes the money (usually the contractor or subcontractor with whom the claimant has a contract).

• Lien Action: Filed against the property itself and the owner. This option is often necessary if the party owing the money has declared bankruptcy, has passed away, or if the contract contains a pay-if-paid or pay-when-paid clause delaying payment.

In short, if payment depends on the owner first paying the prime contractor, a lien action may be required to secure rights directly against the property.

The Importance of Filing Lis Pendens in Mississippi

Alongside a payment or lien action, a lis pendens notice must be filed in the land records. This notice alerts the public that the property is subject to litigation.

Failure to file a lis pendens at the same time as the enforcement action will invalidate the lien entirely. Mississippi courts have confirmed that a lien becomes void if the lis pendens is filed even weeks late.

Where and When to File

Lien enforcement actions in Mississippi may be filed in County Court, Circuit Court, or Chancery Court, depending on the size of the claim. Arbitration may also be required if stipulated in the contract.

Deadlines are strict:

• 180 days: Payment or lien actions must be filed within 180 days of recording the lien.

• Amended liens: Even if the lien amount is amended, the enforcement deadline is tied to the original filing date.

• Notice of contest: If filed by the owner or contractor, the deadline shortens to 90 days from the lien filing date.

Notice of Contest of Lien

A notice of contest of lien allows an owner, contractor, or their attorney to shorten the time available for enforcement. This notice is filed in the Chancery Clerk’s office and must be delivered to the lien claimant.

Claimants should watch carefully for this notice, as it cuts the enforcement window from 180 days down to 90. If no action is filed within that time, the lien is automatically extinguished by law, with no further release or voiding required.

Filing a Lawsuit to Enforce the Lien in Mississippi

Enforcing a lien requires a lawsuit similar to other civil cases. The process includes:

• Preparing a summons issued by the clerk.

• Filing a complaint stating the contract and payment terms that give rise to the lien.

• Serving the defendants (contractor, owner, or both) with the complaint and summons.

If the claimant fails to commence action within the statutory period, the lien becomes unenforceable, even though a breach of contract claim may still remain.

Proving the Lien in Court

Once a lien enforcement action is filed, the claimant must prove entitlement to payment. Owners may raise defenses such as lien waivers signed with payment applications.

Mississippi courts also have discretion to award reasonable costs, interest, and attorney’s fees to a successful claimant. Therefore, it is important that complaints specifically request these remedies.

Cancelling a Satisfied Lien in Mississippi

Often, recording a lien alone is enough to trigger payment. Once payment is received, lien claimants must:

• File a cancellation of lien in the same office where the lien was originally filed.

• Comply within 15 days of a written demand to cancel the lien.

Failure to cancel in time can result in penalties of at least $500 per day, along with attorney’s fees and costs for enforcement.

Arbitration and Liens

Filing a demand for arbitration does not extend lien enforcement deadlines. Claimants must still meet the statutory deadlines while preserving arbitration rights.

The usual practice is to file the payment or lien action, note that arbitration rights are reserved, and then stay the court action until arbitration concludes. Afterward, the court case resumes as needed to enforce the arbitration award.

Priority of Liens

Mississippi liens do not operate on a priority basis. If multiple lien claimants exist, proceeds are distributed pro rata among them.

This makes it crucial to join lawsuits already filed, ensuring inclusion in the final distribution of funds.

Out-of-State Contractors: Special Requirements in Mississippi

Contractors from outside Mississippi must ensure compliance with corporate registration requirements. To pursue lien enforcement in Mississippi:

• The business must be registered with the Mississippi Secretary of State.

• A valid certificate of responsibility must be maintained.

Failing to keep registration current can prevent a contractor from pursuing a lien lawsuit, even if the lien itself is otherwise valid.

Final Thoughts

Mississippi lien law is exacting and unforgiving. The right to recover depends on compliance with statutes, performance on the project, and the specific terms of the contract. Key points to remember include:

• Perfect liens properly before enforcement.

• File actions within 180 days, or 90 days if contested.

• Always file a lis pendens notice with enforcement actions.

• Cancel liens promptly once payment is secured.

• Maintain proper business registrations for legal standing.

By following these steps precisely, contractors and suppliers can protect their payment rights and avoid losing lien protection in Mississippi.

Common Questions Contractors Ask

If I’ve only received partial payment after filing a lien, do I need to record a partial satisfaction of lien? Or does the $500 penalty only apply after full and final payment?

If you filed a lien for, say, $100,000 and later received a partial payment of $50,000, you should file an amended lien to reflect the reduced balance still owed ($50,000). This is not considered a cancellation of lien because the debt has not been fully satisfied. The $500 per-day penalty applies only when a lien has been fully satisfied and the claimant fails to cancel it within the statutory time frame.

When waiting the 10 days before filing a lien on a residential project, do the 10 days start from when the pre-lien notice to the owner was signed or from when it was mailed?

The requirement is that the owner must receive the notice at least 10 days before the lien is filed. The purpose of this rule is to give the property owner the opportunity to resolve the issue before a lien is recorded. Simply signing or mailing the notice is not enough. The 10-day clock begins once the owner receives the pre-lien notice.

A lien must be delivered to the owner or prime contractor within two days of filing. Does this apply to both commercial and residential liens? And should it be sent by FedEx to ensure delivery?

Yes, the statute requires that a copy of the lien be sent within two business days of filing, and this applies to both residential and commercial projects.

The lien can be sent by:

• Certified mail

• Return receipt mail

• Statutory overnight delivery (such as FedEx, provided it is overnight service)

This ensures proper proof of compliance with the delivery requirement.

What exactly is the purpose of the 10-day pre-lien notice in residential projects?

In residential construction, if you are not in direct contract with the owner, you must provide the owner with a pre-lien notice at least 10 days before filing the claim of lien.

The purpose of this notice is to give the homeowner time to address or resolve the issue before the lien is recorded. For example, if you delay mailing the notice and the owner does not receive it until just before filing, the owner is deprived of the 10-day opportunity to prevent the lien. Therefore, the notice must be in the owner’s hands at least 10 days before filing.

Do lien laws and deadlines work the same across all states?

No. Each state has its own lien statutes, forms, and deadlines. What applies in one state may not apply in another, not even in neighboring states. Contractors and suppliers should carefully review the lien requirements of the specific state where the project is located to ensure they are properly protected.