Are you participating in a construction project based in North Carolina, or have you recently furnished materials for a project with property in North Carolina? If so, you may be entitled to Mechanics Lien protection under the North Carolina Lien Law. Before you file a Mechanics Lien, it’s important to understand the basic provisions of the law and know the documents you will be responsible for Filing and Serving. The following are those you should be aware of in order to maintain your Mechanics Lien Rights in the state of North Carolina:
Claim of Lien on Real Property (known as a “Mechanics Lien” in most other states)
Any party in direct contract with the Property Owner can file a Claim of Lien on Real Property in the state of North Carolina. This includes General Contractors, separate independent contractors, and design professionals. The Claim of Lien on Real Property must be filed with the Clerk of the county in which the property is located within 120 days of the last date of furnishing labor and/or materials to the project. The Claim of Lien on Real Property must include the following:
- Name and address of the person filing the claim
- Name and address of the Real Property Owner
- Description of the Real Property (street address, tax lot and block number, reference to recorded instrument or any other description of the real property is sufficient)
- Name and address of the person with whom the claimant contracted for the furnishing of labor and/or materials
- The date labor and materials were first furnished
- The date labor and materials were last furnished
- A general description of the labor performed on or the materials provided to the project AND the amount claimed
Notice to Mechanics Lien Agent (more commonly known as a “Preliminary Notice” in other states)
According to North Carolina Lien Law, all contractors and potential Mechanics Lien claimants must File and Serve a Notice to Mechanics Lien Agent to preserve their Lien Rights. This notice serves to alert the Property Owner of the claimant’s presence on the project. Property Owners in North Carolina are required to designate a Mechanics Lien Agent for construction projects where the total cost of improvement is $30,000 or more (excludes improvements to existing family residences). The Property Owner (or General Contractor on the Owner’s behalf) must designate the Mechanics Lien Agent within 7 days of contracting and post the Mechanics Lien Agent’s information onsite of the project.
The Notice to Mechanics Lien Agent must be Filed and Served within 15 days of first furnishing labor and/or materials to the project. This notice must be filed with the County Recorder and sent via certified mail, physical delivery with a proof of receipt, or by email with a delivery of receipt. It’s important to note that General Contractors do not need to file a Notice to Mechanics Lien Agent so long as the Mechanics Lien Agent information is in their contract.
Notice of Subcontract
All subcontractors, regardless of the party with whom they contracted, are required to File and Serve a Notice of Subcontract to the General Contractor within 75 days of the first furnishing of labor and/or materials to the project. If the Notice of Subcontractor is sent later or not at all, the subcontractor risks losing its ability to recover all of the amount owed to them.
Notice of Claim of Lien upon Funds (called the “Stop Payment Notice” in other states)
According to North Carolina Lien Law, if the Property Owner still owes money to the General Contractor and receives a Notice of Claim of Lien upon Funds by a subcontractor, the Owner cannot pay the General Contractor until the subcontractor’s Mechanics Lien is removed. The Notice of Claim of Lien upon Funds must be Filed and Served to the Property Owner, General Contractor and other related parties 10 days before recording a Mechanics Lien.
These are just a few key documents you will need to File and Serve in order to secure your jobsite accounts receivable in the state of North Carolina. For a more comprehensive understanding of the North Carolina Lien Law and all its provisions, choose a professional Notice of Preliminary Notice and Mechanics Lien Service to prepare and serve your North Carolina Notice to Mechanics Lien Agent, Notice of Subcontract, Claim of Lien on Real Property, and Notice of Claim of Lien upon Funds. Using such a service will ensure that the proper research is done so you minimize the risk of loosing your Lien Rights due to misinformation.
CRM Lien Services will thoroughly research and verify all of the information included in your Notice to Mechanics Lien Agent, Notice of Subcontract, Claim of Lien on Real Property, and Notice of Claim of Lien upon Funds so your Lien Rights are fully protected. We stay current with the changes to the North Carolina Lien Law so your notices are prepared according to the latest statutes.
If you’d like to request a proposal for our services, click here.