When contractors or suppliers aren’t compensated for their work on a construction project in North Dakota, they have the right to file a mechanics lien to secure payment. A mechanics lien serves as a legal claim, giving the unpaid party a security interest in the property.

It is crucial to have a construction lien recorded in North Dakota, which involves including necessary information such as property descriptions and amounts due and ensuring timely recording with the county recorder to perfect the lien.

At CRM Lien Services, we specialize in ensuring that you get paid quickly and reliably. We can prepare and file mechanics liens for you in accordance with North Dakota law, taking into account North Dakota construction lien law and state-specific rules and regulations, including the need for an adequate and ascertainable description of the real estate.

This guide outlines the essential rules, requirements, and deadlines for successfully filing a mechanics lien North Dakota.

Key Takeaways

• Broad Mechanics Lien Rights: In North Dakota, contractors, subcontractors, suppliers, and design professionals, including architects and engineers, can file a mechanics lien to secure payment for their work or materials.
• Strict Filing Deadlines: To retain full lien rights, you must file a mechanics lien within 90 days after the last day of providing labor or materials. Late filings up to 3 years are allowed but with limited protections.
• Mandatory Notice Requirements: A Notice of Intent to Lien must be sent to the property owner 10 days before filing the lien to comply with North Dakota’s lien laws.

Overview of North Dakota Mechanics Liens

A North Dakota mechanics lien is a legal claim against a property that has been improved by a contractor, subcontractor, or supplier. The primary purpose of a mechanics lien is to secure payment for labor, materials, or services provided to a construction project. This legal tool ensures that those who contribute to the enhancement of a property are compensated for their efforts. In North Dakota, mechanics liens are governed by the North Dakota Century Code, Chapter 35-27, which outlines the specific rules and regulations for filing and enforcing these liens.

Who Can File a North Dakota Mechanics Lien?

In North Dakota, mechanics lien rights are available to contractors, subcontractors, and material suppliers, offering comprehensive protection to those contributing to a construction project. Those who make improvements on such real estate are entitled to file a lien, emphasizing the contractual relationships involved, including owners, agents, contractors, and subcontractors. Unlike some states, North Dakota grants lien rights to suppliers who provide materials to other suppliers.

Additionally, architects, surveyors, engineers, professional soil testers, mappers, and those involved in demolition or excavation typically also have the right to file mechanics liens, ensuring they can secure payment for their work.

Can an Unlicensed Contractor File a North Dakota Mechanics Lien?

No, in North Dakota, if the work requires a state-issued license and the claimant does not hold a valid one, they will not only lose the right to file a mechanics lien but they will also be prohibited from pursuing any legal action for nonpayment related to their construction services. Additionally, claimants must provide an itemized and verified account of their claims, including detailed documentation and the necessity of presenting the claim amount and claimant’s contact information.

When Is the Deadline to File a North Dakota Mechanics Lien?

In North Dakota, a lien claimant must file a mechanics lien within 90 days of the last day they provided labor or materials to the project to ensure full protection.

A lien filed after this period is still possible, but it will not be valid against purchasers or encumbrances whose rights accrued before the lien was filed. It will also be invalid against the property owner to the extent that the owner has already paid the general contractor before the lien’s filing.

Even with late filings, all mechanics liens must be filed within 3 years of the first provision of labor or materials. However, it remains unclear whether this 3-year period starts from the initial furnishing on the entire project or from the first supply by the specific lien claimant. For safety, claimants missing the 90-day window should consider the 3-year period to begin with the project’s start.

Does a North Dakota Mechanics Lien Need to Include a Legal Property Description?

The requirement is unclear. In North Dakota, a mechanics lien must include a description of the property, though how detailed this description needs to be is not explicitly defined. A full legal description will certainly meet the requirement, but it’s uncertain how specific the property description must be. As a best practice, including the legal description, is recommended, though a description that sufficiently identifies the property may also satisfy the requirement.

Can Attorney Fees, Collection Costs, or Other Amounts Be Included in the Lien Amount?

No, in North Dakota, the amount of a mechanics lien is restricted to the difference between the “agreed upon sum” or the “reasonable value of the work performed and materials provided” and what has already been paid to the lien claimant. The amount of the lien is limited to the difference between the price paid by the owner or agent and the price or value of the contribution. Change orders or additional work may be included in the lien claim.

However, attorney’s fees and any indirect or consequential damages are not part of the lien claim itself. If the property owner successfully defends against a mechanics lien in court, they are entitled to recover costs and attorney’s fees from the unsuccessful claimant.

Does a North Dakota Lien Have Priority Over Pre-Existing Mortgages or Other Construction Loans?

North Dakota mechanics liens take priority over liens or encumbrances that attach to the property after the project begins. For priority purposes, mechanics liens “relate back” to the date of the first labor or materials furnished on the project, regardless of when the specific lien claimant started their work. However, an important exception applies to construction mortgages. Mechanics liens do not take priority over a construction mortgage, even if the mortgage was unrecorded when the work or materials were first provided.

When there are multiple mechanics liens, they are prioritized by tier as follows:

1. manual labor,
2. materials suppliers,
3. subcontractors (excluding manual laborers), and
4. general contractors.

Liens filed after the 90-day window but within the 3-year limit only hold priority based on their filing date.

Do I Need to Send a North Dakota Preliminary Notice?

Yes, North Dakota enforces mandatory notice requirements for filing a valid mechanics lien, along with optional notices that certain potential lien claimants—other than the primary contractor—can provide to the property owner.

One optional notice allows a potential lien claimant, who isn’t the prime contractor, to notify the owner to withhold funds from the prime contractor sufficient to cover the claimant’s lien, ensuring direct payment to the claimant.

Another optional notice helps preserve the ability to file a lien solely on the structure without affecting the underlying property. This is allowed when the work involves constructing a new, independent structure. To secure this type of lien, the lien claimant must provide a specific optional notice to the property owner.

When Do I Need to Send a North Dakota Preliminary Notice?

The optional preliminary notice for a lien on both the land and the structure can be given at any time before filing the lien, potentially even before providing the mandatory notices.

For a lien solely on the structure, the optional preliminary notice must be delivered to the owner when the materials are supplied.

The mandatory notice, which must be served at least 10 days before filing the lien, must reach the property owner no later than 80 days after the claimant’s last labor or materials were provided to ensure the lien is filed on time.

5 Essential Things to Know About North Dakota Mechanics Liens

Contractors and suppliers have strong lien rights in North Dakota. If they aren’t paid for their work on a North Dakota project, they can file a lien to help secure payment and protect their interests. However, following specific guidelines and rules is essential.

Here are five key things you should know about North Dakota’s mechanics lien law:

1. Equipment Leasing Companies Have Limited Lien Rights: While North Dakota provides broad lien rights to various parties, including contractors, subcontractors, suppliers, architects, engineers, and demolition crews, equipment leasing companies only have mechanics lien rights if they contract directly with the property owner. Alternatively, the property owner must sign the contract between the equipment lessor and the hiring party for the lien to apply.
2. You Have 3 Years to File a Lien, But Full Rights Require Timely Filing: North Dakota allows project participants to file a lien up to 3 years after providing the last labor or materials. However, to receive full lien protection, the lien must be filed within 90 days of the last furnishing labor or materials. Liens filed after this 90-day period do not affect subsequent purchasers or encumbrances made before the lien’s filing. Some debate exists over whether the “first furnishing” refers to the start of the project or the lien claimant’s specific contribution. To avoid issues, it’s best to measure the 3-year deadline from the project’s first delivery date.
3. A Notice of Intent to Lien Is Required: Although a preliminary notice isn’t mandatory in North Dakota, a Notice of Intent to Lien must be sent 10 days before the actual filing of the lien. This step is crucial to proceed with the lien claim.
4. Liens on Structures Can Take Priority Over Property Liens: If working on new construction, North Dakota allows contractors or suppliers to file a lien against the structure itself rather than the land. Material suppliers and laborers who send a preliminary notice can file a lien on the building, which may take priority over earlier claims, titles, or mortgages on the land where the structure is located.
5. Licensing Isn’t Required, But It’s Recommended North Dakota does not require contractors to hold a specific license to file a mechanics lien. However, while not having a license won’t invalidate the lien, it’s generally advisable to be licensed for the work being performed.

How to File a Mechanics Lien in North Dakota?

If you’ve gone unpaid for work or materials provided to a construction project in North Dakota, filing a mechanics lien (also known as a “construction lien” in ND) may be your next step. Most professionals in the construction industry are eligible to file a lien in North Dakota, and this legal tool is highly effective in securing payments.

This guide outlines the steps you need to take to file a mechanics lien in North Dakota, ensuring you’re protected against non-payment.

Who Can File a Mechanics Lien in North Dakota?

In North Dakota, lien rights extend to a wide range of construction participants. This includes prime contractors, subcontractors, and material suppliers. Additionally, design professionals such as architects, engineers, and surveyors are also eligible to file a lien. Equipment lessors may also have lien rights if they contract directly with the property owner or if the owner signs the equipment lease agreement.

Preliminary Notice

While North Dakota does not require traditional preliminary notices to secure lien rights, it’s still a good idea to send one. Doing so improves visibility and communication, and it can potentially speed up payment times.

Step 1: Send a Notice of Intent to Lien

Before filing a lien, North Dakota law requires that a Notice of Intent to Lien be sent to the property owner at least 10 days before submitting the lien. This notice must be sent by certified or registered mail to maximize protection. It should be received within 80 days of the last furnishing of labor or materials.

Step 2: Prepare Your North Dakota Lien Form

Once you’ve sent the Notice of Intent, you can prepare your mechanics lien form.

This form must include several critical pieces of information:

1. Your Information: Include your full legal name or business name, along with the proper designation (LLC, Inc., etc.).
2. Description of Labor and Materials: Provide a brief description of the labor or materials you supplied to the project.
3. Description of the Property: The lien must include a description of the property. The best practice is to include a full legal description if possible.
4. Amount of the Lien: State the amount owed, limited to the difference between the contract price and any payments made.
5. First and Last Dates of Furnishing: Include the dates when you first and last provided labor or materials to the project.
6. Hiring Party Information: List the name and address of the party who hired you for the project.
7. Signed and Verified: You must sign and verify that all information provided is accurate.

Mechanics Lien Form and Content

To file a valid North Dakota mechanics lien, the form must include several critical pieces of information.

This ensures that the lien is properly documented and enforceable.

The required information includes:

• Claimant Information: The name and address of the person or company filing the lien.
• Property Owner Information: The name and address of the property owner.
• Property Description: A legal property description of the property being liened.
• Amount Due: The total amount owed to the claimant for their labor, materials, or services.
• Dates of Contribution: The dates when the claimant first and last provided labor or materials to the project.
• Contracting Party: The name of the person or entity with whom the claimant contracted.

Required Information

In addition to the above details, the mechanics lien form must include a statement indicating that the claimant has not been paid for their labor, materials, or services. This statement is crucial as it justifies the filing of the lien. The form must be signed and notarized by the claimant to affirm the accuracy of the information provided. Ensuring all these elements are included will help in creating a valid and enforceable mechanics lien.

Step 3: File Your North Dakota Mechanics Lien

Once your lien form is complete, it’s time to file.

Here are your filing options:

1. In-Person Filing: Visiting the recorder’s office ensures any errors are immediately corrected and guarantees same-day filing.
2. Mail Filing: Mailing your lien is convenient, but it may take longer and leaves less room for corrections if errors arise.
3. Electronic Filing: Some counties in North Dakota allow electronic lien filings through third-party services. Be sure your documents are properly formatted and legible.

Deadline to File a North Dakota Mechanics Lien

To secure full mechanics lien rights, you must file the lien within 90 days after the last date of furnishing labor or materials. While North Dakota allows liens to be filed up to three years from the start of work, filing after 90 days diminishes your lien’s effectiveness. Late filings are not valid against subsequent purchasers or encumbrances.

Step 4: Enforce or Release Your Mechanics Lien

Once you’ve filed the lien, you may need to take further action:

1. Enforce (Foreclose) Your Lien: A mechanics lien North Dakota is valid for three years. To enforce the lien, you must file a foreclosure action within that time or within 30 days if the owner serves a written demand.
2. Release (Cancel) the Lien: North Dakota doesn’t have specific rules for releasing a mechanics lien once payment is received, but it’s common practice to exchange payment for a lien release. This involves filing a release document in the same office where the lien was recorded.

Filing a mechanics lien in North Dakota can help ensure you get paid for your work or materials. By following the steps in this guide and adhering to state-specific requirements, you can secure your lien rights and protect your financial interests.

Enforcing a North Dakota Construction Lien

Foreclosure Process

To enforce a North Dakota construction lien, the claimant must take specific legal steps. The process begins with filing a lawsuit in the district court within three years of recording the lien. This step is crucial to initiate the foreclosure process. Additionally, the claimant must provide written notice to the property owner of their intention to foreclose on the lien. This notice must be served personally or sent by certified mail at least 10 days before filing the lawsuit.

If the property owner fails to pay the amount due, the court may order the sale of the property to satisfy the lien. This legal action ensures that the claimant can recover the owed amount. Furthermore, the claimant may also be entitled to recover reasonable attorney’s fees and costs associated with enforcing the lien, adding an extra layer of financial protection.

It is essential to note that North Dakota mechanics liens have specific requirements and deadlines. Failure to comply with these requirements can result in the lien being invalid or unenforceable. Therefore, it is highly recommended that claimants consult with North Dakota construction attorneys to ensure that their lien is properly filed and enforced. These legal professionals can provide valuable guidance and help navigate the complexities of the lien process, ensuring that the claimant’s rights are protected.

Get in Touch

In North Dakota, mechanics liens offer a powerful legal tool for contractors, suppliers, and design professionals to secure payment on construction projects. To ensure your lien is valid, it’s essential to follow state-specific requirements, including providing timely notices, preparing accurate lien forms, and meeting filing deadlines. By adhering to these guidelines, you can protect your financial interests and improve your chances of receiving payment for your work.

At CRM Lien Services, we have been serving customers across the country with required reference documentation for lien claims since 1986. We assist property owners in navigating the mechanics lien process, informing them about their rights and responsibilities, including providing notices, securing payment, and releasing mechanic’s liens.

We have a wealth of expertise, are licensed and insured, and have a team of highly knowledgeable document processors. If you’re looking for a straightforward process for filing a mechanics lien, give us a call or shoot us an email.