Senate Bill 2658

AN ACT TO CREATE SECTION 87-7-9, MISSISSIPPI CODE OF 1972, TO SPECIFY THE MAXIMUM RETAINAGE ALLOWED FOR PRIVATE CONTRACTS TO BUILD OR REPAIR IMPROVEMENTS TO REAL PROPERTY; TO EXEMPT RESIDENTIAL PROPERTY; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following shall be codified as Section 87-7-9, Mississippi Code of 1972:

87-7-9. (1) As used in this section, the following words shall have the meanings ascribed to them as follows:

(a) "Contract" means a written or oral agreement between the owner and contractor relative to the design, construction, alteration, repair, or maintenance of a building, structure, highway, appurtenance, appliance or other improvements to real property.

(b) "Contractor" means any person contracting or undertaking with an owner to do any erection, building, construction, reconstruction, repair, maintenance or related work on private projects.

(c) "Owner" means any individual, corporation, nonprofit corporation, partnership, limited partnership, limited liability company or other business entity that is the owner of record or lessee of real property subject to the applicable terms of the contract.

(2) (a) In any contract for the construction, repair, alteration or demolition of any building, structure or facility situated within the boundaries of the State of Mississippi, that provides for progress payments in installments based upon an estimated percentage of completion with a percentage of the contract proceeds to be retained by one (1) of the parties to that contract, a third party to that contract or contractor, pending completion of the contract, such retainage shall be no more than five percent (5%), and the amount retained by the contractor from each payment due any subcontractor shall not exceed five percent (5%).

(b) On any contract, of which the total amount is Two Hundred Fifty Thousand Dollars ($250,000.00) or greater, or on any contract with a subcontractor, regardless of amount, five percent (5%) shall be retained.

(c) The provisions of this chapter do not apply to any contract for the construction, repair, alteration or demolition of any residential property, as that term is defined in Section 85-7-401.

(d) Compliance with this subsection (2) is mandatory and may not be otherwise waived or altered by agreement, written or oral.

(e) The provisions of this section apply to all contracts made or entered into on or after July 1, 2018, or renewed or renegotiated on or after July 1, 2018.

SECTION 2. This act shall take effect and be in force from and after July 1, 2018.