Providing a North Carolina preliminary notice is a practical approach to accelerating payments during a construction project. This notice serves as an informational document, often delivered to the property owner early in the project’s timeline. Understanding the guidelines and obligations for issuing a preliminary notice in North Carolina is essential for ensuring compliance and protecting your payment rights.
Key Takeaways
- Timely Submission is Critical: Sending a preliminary notice within the required timeframes—such as within 15 days for the Notice to Lien Agent—is essential for protecting mechanics lien rights and ensuring payment security.
- Multiple Notices May Be Required: Depending on your role, you may need to submit different notices, such as the Notice of Contract or Notice of Subcontract, to safeguard your interests and avoid risks like double payment.
- Proper Delivery Methods Matter: Notices must be sent using verifiable methods, such as certified mail or other accepted delivery services, to ensure they are legally recognized and accepted.
Do I Need to Send a North Carolina Preliminary Notice for Private Projects?
In most situations, providing some form of notice is mandatory in North Carolina. A preliminary notice must be sent to the designated “lien agent” if one is assigned to the project. However, there are exceptions where a lien agent is not required, such as:
- Projects with an initial building permit valued under $30,000.
- Single-family residences are occupied by the owner.
When a lien agent is involved, potential lien claimants must send a Notice to Lien Agent within 15 days of their first delivery of labor or materials. More details about this can be found in discussions about the “Lien Agent” and its impact on North Carolina mechanics lien laws.
Additionally, North Carolina allows general contractors to shield themselves from double payment risks through subrogation liens filed by lower-tier subcontractors. This is achieved by filing a Notice of Contract. If this notice is filed, second and third-tier subcontractors and suppliers are required to submit a Notice of Subcontract to preserve their rights.
What If I Send the North Carolina Preliminary Notice Late for Private Projects?
Since the notice provision became effective on April 1, 2013, no litigation has yet addressed its implications. However, the clear language of the rule suggests that failing to send the preliminary notice on time could invalidate a lien claim entirely. At a minimum, missing this requirement could negatively impact the lien’s priority if the rule is upheld.
If a general contractor does not file and display the Notice of Contract within the required timeframe, they lose protection from double payment risks due to subrogation liens filed by lower-tier subcontractors or suppliers.
While there isn’t a strict deadline for serving the general contractor with a Notice of Subcontract, a subcontractor is only entitled to payment notifications for payments made after their notice is submitted. Therefore, even though there’s no official “late” submission, earlier notice ensures better protection of rights.
How Should the North Carolina Preliminary Notice Be Sent for Private Projects?
The preliminary notice to the lien agent is typically submitted electronically. However, North Carolina law outlines several other acceptable methods for delivering this notice, including:
- Sending by certified mail with a return receipt requested.
- Utilizing signature confirmation services provided by the United States Postal Service.
- Hand-delivering the notice and obtaining a signed delivery receipt from the lien agent.
- Sending via facsimile with a confirmation of successful transmission.
- Using an authorized delivery service designated under 26 U.S.C. § 7502(f)(2).
- Sending via email, provided a delivery receipt is obtained.
Additionally, the North Carolina Notice of Contract must be recorded with the Clerk of Court in the property’s county and prominently displayed at the job site near the building permit.
As for the Notice of Subcontract, it must be sent to the general contractor, although the law does not specify a required delivery method. For reliability, it is recommended to use certified mail to ensure proper documentation.
Do I Have to Send the North Carolina Preliminary Notice to Someone Other Than the Owner?
The Preliminary Notice to the Lien Agent must be directed to the Lien Agent specified in the building permit. If the permit does not include the Lien Agent’s details, any involved party can request this information and is entitled to a response from the property owner within seven days. Additionally, general contractors and subcontractors are obligated to inform their contracted suppliers of the Lien Agent’s identity within three days of entering into a contract with them.
The Notice of Contract must be recorded with the Clerk of Court in the county where the property is situated and displayed at the project site. Meanwhile, the Notice of Subcontract needs to be sent to the general contractor to ensure they are informed.
Is the North Carolina Preliminary Notice Requirement Met When Sent or Delivered?
It remains uncertain if the Preliminary Notice to Lien Agent is deemed delivered upon being sent or only once it is received. However, the requirement to use a delivery method that confirms actual receipt suggests that the notice must be physically received to meet the obligation.
For the Notice of Contract, it is considered valid when it is filed with the Clerk of Court and visibly posted at the project site. As for the Notice of Subcontract, there are no definitive rules specifying whether it is delivered upon sending or receipt, as the law does not mandate a particular delivery method.
Do I Need to Send a North Carolina Preliminary Notice for Public Projects?
It varies. Subcontractors with claims exceeding $20,000 are required to submit a “Notice of Public Subcontract” within 75 days of beginning work or providing materials to the project. This notice is not necessary for claims under $20,000, and only applies to the portion of the claim above that threshold.
Additionally, General Contractors must provide each subcontractor they hire for labor or materials with a “Contractor’s Project Statement,” which must include:
- The project name
- The project’s physical address
- The name of the contracting entity
- The name of the contractor
When Do I Need to Send a North Carolina Preliminary Notice?
Subcontractors are required to submit the “Notice of Public Subcontract” within 75 days of beginning to supply labor or materials to the project. However, if the General Contractor does not provide the requested bond within 7 calendar days of a formal written request, the 75-day deadline is waived.
There is no specific deadline outlined in the law for when the General Contractor must provide the “Contractor’s Project Statement” to subcontractors.
What If I Send the North Carolina Preliminary Notice Late for Public Projects?
The “Notice of Public Subcontract” can be submitted after the 75-day window, but its effectiveness in preserving the right to file a bond claim will be limited. A late notice will only protect the claim for labor and/or materials provided within the 75 days immediately before the notice is sent. Any work completed more than 75 days before the notice is issued will not be covered.
How Should the North Carolina Preliminary Notice Be Sent for Public Projects?
When notice is necessary, it must be sent using certified mail, with signature confirmation from the U.S. Postal Service, or through any legally acceptable method of service for summons, with prepaid postage.
The “Contractor’s Project Statement” must be delivered to the subcontractors.
About North Carolina Preliminary Notices
North Carolina preliminary notice system can be quite intricate, and while the amendments to the lien laws in 2013 shouldn’t be unfamiliar by now, there are still complexities that can make compliance difficult. Several types of notices may be required depending on the situation, but the main notice requirement is the “Notice to Lien Agent.”
In 2013, North Carolina introduced the concept of a lien agent through legislation. This change was aimed at addressing the issue of “hidden liens” and ensuring that project participants have a clear path to file a valid mechanics lien. To secure this right, individuals must send a preliminary notice to a designated lien agent. This lien agent is typically a title insurance company or agency selected by the property owner under G.S. 44A-11.1.
For private projects in North Carolina with an original building permit value of $30,000 or more, the property owner must designate a lien agent, and anyone wishing to file a lien must serve the lien agent with a preliminary notice. The lien agent’s details should be listed on the building permit, which is posted at the project site. If the lien agent is not listed, a potential lien claimant can request the information from the property owner, who has 7 days to respond. Additionally, contractors and subcontractors are required to notify material suppliers of the lien agent within 3 days of contracting with them.
While the notices are typically submitted through the North Carolina online system, it is not strictly mandatory to use this platform. There are other authorized delivery methods for the notice, such as:
- Certified mail with return receipt requested
- Signature confirmation via the U.S. Postal Service
- Hand delivery with a receipt from the lien agent
- Fax with confirmation
- Delivery via an authorized service under 26 U.S.C. § 7502(f)(2)
- Email with a delivery receipt
The possibility of email delivery is particularly interesting, as there has yet to be any litigation over its validity, which could set important precedents. While it is technically required, failing to meet the lien agent notice deadline does not necessarily prevent a lien from being filed, as long as it is done before the property is transferred to a bona fide purchaser.
Additionally, North Carolina provides a mechanism for general contractors to protect themselves from double payment risks. This is accomplished through subrogation liens filed by second- or third-tier subcontractors. If a general contractor files a notice of contract, subcontractors and suppliers are required to file a notice of subcontract to ensure proper protection.
How to Send Preliminary Notice in North Carolina
Preliminary notices are crucial for initiating the mechanics lien process. Subcontractors and suppliers typically need to submit these notices to secure their right to file a lien. In some cases, other parties like general contractors, property owners, and lenders also rely on these notices to stay informed about who is involved in the project.
Why send a North Carolina preliminary notice?
Issuing a preliminary notice is vital for protecting your mechanics lien rights.
In North Carolina, most individuals and entities involved in construction projects must send a preliminary notice to preserve their ability to file a valid lien claim. It’s highly recommended that all participants, even those not strictly required to send a notice, do so as a best practice. Preliminary notices help foster transparency, ensuring that all stakeholders—owners, lenders, and general contractors—are aware of who is working on the project, which is especially beneficial for large-scale projects.
Who must send a North Carolina preliminary notice, and to whom?
The necessity of a preliminary notice North Carolina varies depending on one’s role in the project. However, many parties are obligated to send some form of notice, and some may need to send multiple notices.
If a lien agent is designated for the project, everyone involved must send a Notice to Lien Agent. If this information is not listed, any party can request it, and the property owner must provide the details within 7 days. This rule, introduced with recent changes to the lien agent law, ensures that lien agents are properly identified.
General Contractors (GCs) may also file a Notice of Contract to protect themselves from the risk of double payment. If a Notice of Contract is filed, all subcontractors, laborers, and material suppliers must submit a Notice of Subcontract.
What must be included in a North Carolina preliminary notice?
North Carolina law mandates that specific details be included in the preliminary notices. You can download free templates for the following forms:
- North Carolina Notice to Lien Agent
- North Carolina Notice of Contract
- North Carolina Notice of Subcontract
When should a North Carolina preliminary notice be sent?
The North Carolina Notice to Lien Agent must be submitted within 15 days of starting work or providing materials on the project.
If a Notice of Contract is used, the GC must file it within 30 days of the building permit being issued.
For the Notice of Subcontract, there is no fixed deadline. It can be served before or after the work begins. However, to ensure proper protection, it’s recommended that the subcontractor file it as soon as possible, as the GC is required to notify the subcontractor of any payments made after receiving the Notice of Subcontract.
How do I send a preliminary notice in North Carolina?
North Carolina preliminary notice should be sent via certified mail, with a return receipt requested, or using another method that provides proof of receipt. For the North Carolina Notice of Contract, it must be filed with the Clerk of Court in the county where the property is located and posted visibly at the job site next to the building permit.
Although the statute doesn’t specifically dictate how the Notice of Subcontract should be delivered to the general contractor, it’s advisable to send it via certified mail for documentation.
Keep in mind:
- Best practice is to send your preliminary notice as soon as work begins.
- Delayed submission of a preliminary notice can jeopardize your lien rights in North Carolina—make sure to submit it on time.
- Failure to timely file a Notice of Contract can leave the general contractor vulnerable to subrogation liens.
Get in Touch
Sending a preliminary notice in North Carolina is a crucial step for securing payment rights during a construction project. Compliance with notice requirements, such as the Notice to Lien Agent, Notice of Contract, and Notice of Subcontract, helps protect the rights of all parties involved, including general contractors, subcontractors, and suppliers. Timely submission is essential, as delays could jeopardize lien claims or expose contractors to risks. Ensuring proper delivery and documentation of these notices will provide better security and reduce the potential for disputes down the line.
At CRM Lien Services, we have been serving customers across the country with required reference documentation for lien claims since 1986. We provide expert guidance, helping contractors and suppliers safeguard their payment rights through seamless and timely preliminary notice and lien filings. 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 preliminary notice and mechanics lien, give us a call or shoot us an email.
