Getting paid on Mississippi jobs: 90 days to file a lien, 180 days to sue, and bonds on public work

Subcontractors and suppliers on the Mississippi Department of Transportation's October and November jobs, or on any private project in the state, have two different payment protections depending on who owns the work. This explainer summarizes the statutes. It is not legal advice.

Private work: the claim of lien

Mississippi's construction lien rules are in Article 21 of Chapter 7, Title 85. To make a lien good, Miss. Code § 85-7-405 requires:

• Substantial compliance with the claimant's contract, subcontract or purchase order.
• Filing the claim of lien with the chancery clerk of the county where the property is located within 90 days after the claimant's last work, labor, services or materials.
• Required wording: the lien must include a statement that it expires and is void 180 days from filing if a payment action is not filed, and a notice that the owner has the right to contest it. Without them, the lien is invalid.
• Notice: within two business days after filing, the claimant sends a copy by registered or certified mail or statutory overnight delivery to the owner. A claimant that is not the contractor also sends a copy to the contractor.

The 180-day clock

A payment action against the party the claimant contracted with must be started in county, circuit or chancery court within 180 days after the lien is filed, with a lis pendens notice and copies to the owner and contractor (§ 85-7-405). If it is not, the claim of lien is unenforceable (§ 85-7-421). There are exceptions, for example when the party the claimant contracted with is bankrupt or deceased and the owner has not paid the contractor; then the claimant may bring a lien action directly against the property within the same time.

A lien can be amended to raise or lower the amount, and the amendment relates back to the original filing. The total of all liens cannot exceed the contract price between the owner and the contractor. Once a lien is paid, the holder must file a cancellation; failing to do so within 15 days of a written demand can cost at least $500 a day plus attorney's fees (§ 85-7-421).

Public work: bonds

Liens do not apply to public property. Under Miss. Code § 31-5-51, contractors on public work furnish a performance bond and a payment bond, each of not less than the contract amount. A person who furnished labor or material and has not been paid in full 90 days after its last labor or materials may sue on the payment bond, provided the work was approved where approval is required. A claimant that dealt with a subcontractor rather than the prime must give the prime written notice within 90 days of its last work, stating the amount with substantial accuracy. For contracts under $25,000, the owner may pay in a lump sum at completion and acceptance, and the bonds are not required. Separately, contractors must show at least $1 million in general liability coverage before signing state contracts over $5,000 or local contracts over $25,000.

Bidding requirements that protect the owner

On MDOT jobs, each bid comes with a bid bond, cashier's check or certified check for 5% of the bid. The bid bond must be signed or countersigned by a Mississippi resident agent or a qualified nonresident agent with a power of attorney. Bids over $50,000 must show the contractor's MSBOC Certificate of Responsibility number (Miss. Code § 31-3-21), and nonresident bidders must attach their home state's preference law, if any, or the bid is rejected.

Practical steps

• Track your last day of work or delivery on every job; both the lien and bond clocks run from it.
• On a public job, ask the prime for a copy of the payment bond before you start.
• If you are a second-tier subcontractor or supplier, send the prime written notice well inside 90 days.
• On private work, make sure your claim of lien carries the required expiration statement and owner notice.

See our lien and bond guide and the current MDOT jobs on our bids page.