This bill revises various provisions relative to mechanics' and materialmen's liens, as follows: (1) Under present law, for a prime contractor, the lien must be enforced in a court of law or equity by attachment or in a court of general sessions having jurisdiction by a warrant for the sum claimed and writ of attachment, filed under oath, setting forth the facts, describing the real property, to be served on the persons whose interests the prime contractor seeks to attach and sell under process, and the owner or owners are to be given notice only of the filing of such warrant and writ of attachment. This bill revises the above provisions to provide that the lien must be enforced in a court of law of equity by "complaint and writ of attachment" instead of "by attachment". This bill also removes the provisions that the owner or owners are to be given notice only of the filing of such warrant and writ of attachment. (2) This bill also makes the changes described above in the present law provisions regarding a remote contractor. Also, in regard to remote contractors, present law provides that in the discretion of the plaintiff or complainant, the warrant and writ of attachment may be served on the prime contractor, or remote contractor in any degree, with whom the plaintiff or complainant is in contractual privity, but the owner or owners have the right to make the prime contractor or remote contractor a defendant by third-party complaint or cross-claim. This bill specifies that "the person or persons whose interest the remote contractor seeks to attach and sell" instead of "the owner or owners" have the right to make the prime contractor or remote contractor a defendant by third-party complaint or cross-claim. (3) Under present law, where a bond has been provided, an attachment on the real property is not necessary after the bond has been recorded, and the lien is enforced by an action on the bond before the circuit or chancery court, or before a court of general sessions where the amount is within its jurisdiction, filed under oath, setting forth the facts and describing the real property. Any such action must be served on the principal of the bond and may, in the discretion of the plaintiff, be served on the owner or owner's agent, prime contractor, the remote contractor in any degree with whom the plaintiff is in contractual relation, and the surety on the bond, but the prime contractor, any remote contractor of any degree or the surety on the bond will have the right to make others a defendant by third-party complaint or cross-claim as is otherwise provided by law. This bill revises the above provisions regarding who will be served to provide that process must be served on the obligors on the bond and may, in the discretion of the plaintiff or complainant, also be served on the other persons listed above, including a remote contractor with whom the plaintiff is in "contractual privity" instead of "contractual relation". This bill also revises the above provisions regarding making others a third party to specify that the obligors on the bond will have the right to make the owner or owner's agent, prime contractor, or remote contractor of any degree a defendant by third-party complaint or cross-claim. This bill adds that any action on the bond must be filed in the county where any portion of the real property is located. (4) Under present law, when a prime contractor or remote contractor has provided a valid payment bond for the benefit of potential lien claimants, a copy of that bond may be recorded, in lieu of the recording of another bond, to discharge a lien asserted by the lien claimants. A copy of the bond may, at the contractor's option, be recorded with the register of deeds in lieu of the bond recorded to indemnify the lien, to discharge such a lien. This bill removes the provision whereby a copy of such bond may be recorded only "at the contractor's option." This amendment also adds that the person asserting the lien may make the obligors on the bond parties to any action to enforce the claim, and any judgment recovered may be against all or any of the obligors on the bond. (5) Under present law, the recorded bond described in (4) above must: (A) Be in a penal sum at least equal to the total of the original contract amount; (B) Be in favor of the owner; (C) Have the written approval of the owner endorsed on it; (D) Be executed by the original contractor as principal, and a sufficient corporate surety authorized and admitted to do business in this state and licensed by this state to execute bonds as surety; (E) Provide for payment of the lien claimant, whether the lien claimant was employed or contracted with by the person who originally contracted with the owner of the premises or by a remote contractor; and (F) Provide for payment for extras, not exceeding 15 percent of the prime contractor's contract price, if and to the extent the lien claimant is claiming extras. This bill removes the requirements described above in (C) and (F).

Statutes affected:
Introduced: 67-6-217(d), 67-6-217