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Thursday, October 6, 2016

North Carolina's Mechanics' Lien and Bond Laws - Part 5

Part 5 in a Continuing Series


This article by Attorney Lee Peindl is one of a continuing series of articles that focuses on legislation affecting North Carolina's Mechanics' Lien and Bond Laws.  It is adapted from Attorney Lee Peindl's seminar on Lien Law changes.

Changes to the Claim of Lien on Real Property Form and Service of Claims of Lien on Real Property
Effective January 1, 2013


Claims of Lien on Real Property Must Be Served—N.C. Gen Stat §44A-11

North Carolina’s current laws require filing, but not serving, Claims of Lien on Real Property. Effective January 1, 2013, Claims of Lien on Real Property must be served upon the owner, and if the Claim of Lien on Real Property is being asserted by a subcontractor or supplier (e.g. by subrogation pursuant to N.C. Gen. Stat. § 44A-23), then it must also be served upon the contractor. The Claim of Lien on Real Property will not be perfected until it is both served and filed. Therefore, service and filing of the Claim of Lien on Real Property should occur before 120 days after the last furnishing of labor or materials at the site of the improvement by the person claiming the lien.

Service is deemed complete when the Claim of Lien on Real Property is:

(1)        personally delivered;

(2)        deposited for delivery via the USPS; or

(3)        deposited for delivery via (a) DHL Express; (b) Federal Express; or (c) UPS.

Parties can be served at (i) the address the party listed on the permit relating the project, (ii) the address for the party listed on the tax rolls for any county in North Carolina, or (iii) the address for the registered agent of the party listed with the Secretary of State.

The Form of the Claim of Lien On Real Property is Changing-N.C. Gen. Stat. §44A-12(c)

North Carolina law currently does not require a Claim of Lien on Real Property to contain a certification that it was served or require a subrogated lien to name the contractor through which subrogation is asserted. Effective January 1, 2013, each Claim of Lien on Real Property must include a certification of proper service. If the Claim of Lien on Real Property is being asserted by a subcontractor or supplier (e.g., by subrogation pursuant to N.C. Gen. Stat. § 44A-23), then it must also name the contractor through which subrogation is asserted. Chapter 44A also now expressly allows subcontractors and suppliers to use either (a) their own dates of first or last furnishing of labor or materials, or (b) the contractor’s dates of first or last furnishing of labor or materials (a sample form is attached to these materials).

Practice Tip: Many local Clerks of Superior Court in North Carolina require an additional certification, statement, or other indication that a claim of lien on real property is being filed pursuant to a statute, and they can arguably implement such a requirement under the language of §44A-12.  Oftentimes these Clerks will refuse to file a claim of lien on real property that does not contain such a statement, which can mean a loss of lien rights if the claimant is up against the 120-day filing deadline.

To prevent this problem, practitioners should insert the following statement at the top of the claim of lien on real property form before filing: Filed Pursuant to N.C. Gen. Stat. §44A-12

North Carolina's Mechanics' Lien and Bond Laws - Continuing Series

We will examine this topic in further detail in upcoming blog posts.

In case you missed them here is Part 1Part 2Part 3 and Part 4

If you are in need of legal assistance with this type of matter please fill out our potential client intake form so that Attorney Peindl can evaluate your legal matter.

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