Thursday, October 20, 2016

North Carolina's Mechanics' Lien and Bond Laws - Part 7

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. This is the final installment in this series.

Necessary and Proper Parties to an Action for Lien Enforcement—Effective Immediately
(N.C. Gen. Stat. §44A-13)

Necessary and Proper Parties to Lien Enforcement Lawsuit

Effective immediately, not all owners, lenders or title insurance companies are necessary or proper parties to lien enforcement actions. N.C. Gen. Stat. §44A-13 now states that a former owner is not a necessary party in a lien enforcement lawsuit if the former owner holds no ownership interest in the property at the time the lawsuit is commenced and if the plaintiff seeks no relief from the former owner.

Subsequent purchasers and lenders also are not necessary or proper parties to lien enforcement lawsuits if the lien has been discharged via cash deposit or via a lien discharge bond. Nothing in the revised statute prevents a lien claimant from asserting any claims that are separate and distinct from enforcement of the lien.

Sanctions for False Statements Expanded and Increased

North Carolina’s current law states that a contractor or other person receiving payment for improvements to real property who knowingly furnishes a false statement of the sums due or claimed to be due (e.g., a fraudulent lien waiver) is guilty of a Class 1 misdemeanor. Effective January 1, 2013, the sanctions for such false statements will increase.

In addition to the criminal sanctions, fraudulent lien waivers will constitute deceit and misconduct subject to disciplinary action under Chapter 87 of the General Statutes. As a result, a person that knowingly furnishes such a false statement may have its license revoked, suspended, or otherwise restricted. Moreover, an individual involved may also lose his or her ability to act as a qualifying party for a license.

This is the final installment of this series.

In case you missed them here are Part 1, Part 2, Part 3 , Part 4 , Part 5 and Part 6

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.