Source: http://constructionlawnc.com/2010/11/11/current-nc-lien-law-part1/
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The ABCs of Current NC Lien Law | Construction Law in North Carolina
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The ABCs of Current NC Lien Law
101 Comments[Author: Melissa Dewey Brumback Category: law notes, liens ]
Since we talked last week about possible changes to the lien law, I’ve had a few folks ask me to take a step back and discuss the ABCs of current lien law in North Carolina. Ask and ye shall receive………..
Part 1: Lien Law Rights for Contractors, Subcontractors, & Design Professionals
Anyone who furnishes materials or labor to improve real property can file a lien on that property. This includes design professionals who provide services related to improvement of real property, contractors, and subcontractors (down to the 3rd tier). What types of liens are there in NC?
There are three types of lien claims in North Carolina.
1. The Claim of Lien on Real Property (NC Gen. Stat. §44A-12) is for a person who contracts directly with the owner of the property. This can be a general contractor, a separate independent contractor, or a design professional.
2. The Notice of Claim of Lien upon Funds (NC Gen. Stat. §44A-18 and §44A-19) is available to subcontractors (down to third-tier subcontractors), and allows them to have a lien right to any funds owed to the party that contracted with them in the chain of title. In other words, if the owner still owes money to the general contractor, and the owner receives a Notice of Claim of Lien upon Funds by a subcontractor (and the lawsuit to enforce the lien is thereafter properly filed), the owner cannot pay the general contractor until the subcontractor’s lien is extinguished.
3. The Subrogated Claim of Lien on Real Property (NC Gen. Stat. §44A-23) also provides real property lien rights to the subcontractor, to the extent the party he contracted with has lien rights.
When and Where must a lien be filed?
Lien claims in North Carolina must be filed in the clerk of court where the property is located, within 120 days of the claimant’s last date of furnishing. What does “perfecting a lawsuit” mean?
A lawsuit must be filed to enforce the lien. This is called “perfecting” the lien, and it must be done within 180 days of a claimant’s last date of furnishing. The lawsuit can be filed in any proper county so long as an appropriate Lis Pendens is also timely filed in the county where the property is located. What special remedies are available for a lien claim?
If a lien lawsuit is perfected and a judgment rendered, the court can direct the property to be sold to satisfy the lien. Additionally, you can recover attorney fees for the lien lawsuit. Pretty cool, huh?
Crafting a proper lien is like making souffle- no room for error!
As you can imagine, liens can be very powerful tools to help ensure recovery of money owed to contractors and subcontractors on a project. The key to exercising your lien rights is to keep watch on the running of the claim period (use of online resources can help with this) and to ensure that the lien is (1) properly drafted; (2) timely served; (3) appropriately filed; (4) perfected with a timely lawsuit. This is not an area where you can make a mistake—liens are subject to strict rules that must be followed to the t. If in doubt about a lien issue, contact a knowledgeable construction law attorney in your jurisdiction.
We’ll continue our discussion with Part 2 (next Thursday), when we discuss how to handle a lien on your property if you are the Owner
Comments about your experience using liens to maximize your chances of recovery? Post below. [And as always, please sign up for an email subscription to the blog if you have not already done so].
Photo “Soufflé” by stu_spivack via Flickr/Wikimedia/Creative Commons
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Add a comment »101 comments to this article
Jessica April 6, 2017 at 11:21 am I need guidance on letter format for filing a lien on auction company who owes me money for selling my equipment on auctions by auction company. I would like to put a lien on their equipment property sold in auctions. They have paid me only partial payment of $400 for equipment sold and still owe me the remaining of $5000/-. It’s been 4 months and still no payment received.
Reply	Melissa Dewey Brumback April 11, 2017 at 2:43 pm Liens against equipment are different from liens on real property. Not familiar enough with the details to assist you there. Sorry!
Reply	Help March 15, 2017 at 11:17 am So this is going to be long, sorry in advance! I owe my home(my name only), FOB did remodeling work, no contract as he was living w me and our son. He now wants to put a lien on home for money, I agreed while doing remodeling that when I sold the home or died I would pay him. He is now wanting to put a date, (when our kid turns 18 on the lien). My question is does a lien have to have a termination date, or can it be that when I sell property or pass away funds them be dispersed to him.
Reply	Melissa Dewey Brumback March 17, 2017 at 12:25 pm A lien that is not followed by a lawsuit to perfect the lien will die a natural death and no longer be valid. You probably need a promissory note, payable at a certain time, secured by a deed of trust on the property. I don’t do that myself, but other partners here would be able to help you if you want to shoot me an email.
Reply	liz G. March 9, 2017 at 4:00 pm What can I do if I have a lein on a property and the person sold the property? How do I get the new owner to pay?
Reply	liz G. March 9, 2017 at 4:12 pm Please see May 13, 2016 post by me. Thanks.
Reply	Pamela January 14, 2017 at 12:18 am When you win a small claims judgement that is good for 10 years can you file the notice of exemptions in order to get the writ of execution at any time? Also can you collect on an inheritance or put a lien on the person vehicle? Buncombe County NC. I am finding it disappointing that the clerk of court did not save me the 130 fee to file my case but discouraged me from filing the 85 dollar fee to do the writ. she said it was a waste of time and that the judgement was unenforceable except for being on a credit report.
Reply	Melissa Dewey Brumback February 16, 2017 at 4:10 pm Pamela:
When you have a judgment, you can file the notice of exemptions and then do the writ at any time during that 10 year period. I’m assuming this is an individual that owes the money, since corporations don’t get any exemptions. You need to file the writ within a certain time period of the filing of the notice, and both the writ and notice need to be served by the sheriff. (You pay the clerk; they get the sheriff involved for you). Before you do this, you may want to see what other judgments are against this person, and consider whether they have any money. You can collect on bank accounts (if an inheritance has been paid; not if you are anticipating one later). You can also collect by the sheriff seizing a vehicle- but they will generally only do that if it is obvious that they have equity in the vehicle and don’t owe more on it than it is worth.
Reply	Pamela Williams February 16, 2017 at 8:34 pm I know in NC you can not garnish wages. But if this person moves to a state that does allow this I assume I can use that option. Also if I pay the fee for them to do the notice and writ and they do not find any assets.Do I have to pay the fee each time I think something has changed in this persons finances? Lastly if this person moves would the court assist in finding this person or would i need to track them through their SS#.
Reply	Melissa Dewey Brumback February 24, 2017 at 11:24 am Pamela:
If they move to a state that allows wage garnishment, you can use that. However, you’d first have to “domesticate” the judgment in the other state first. (Each state’s process is different here). You do have to pay the fee each time; however, the fees get added to the amount that the debtor owes you, so if you do hit some assets, you’ll get those costs back. The court will not let you know if they move– that is all on you, unfortunately.
Reply	Neel Taylor December 28, 2016 at 8:54 am I am a general contractor who did leak repairs for a customer – out of the total bill of approx $11k, she paid me $2500. She received several checks from the insurance company for the full $11k (less her deductible) but has failed to pay me after her boyfriend told me multiple times they were going to pay. It’s now been 2 years and since we obviously failed to do the lien option, can she have a breach of contract complaint dismissed since we had the right to do the lien but didn’t? There is another complication as well – my wife (who legally owns my company) upped the original estimate by about $1300 to help the customer/friend with their deductible and it’s in an email stating this increase was going to be helpful to both parties. Any advice???
Reply	Melissa Dewey Brumback February 16, 2017 at 4:13 pm Hi Neel! You can certainly file a lawsuit on breach of contract even though you didn’t pursue your lien rights. The issue of the upcharge could be troubling as it may point towards insurance fraud for your wife and the customer unless it can be explained as reasonable. Obviously the insurance company thought the quote was reasonable or it wouldn’t have paid it, however. It sounds from your comment like you are already in litigation on this issue? I would be very surprised if a court dismissed a breach of contract simply because you didn’t file a lien. (I believe that would be reversible error). Let me know if I can help.
Reply	EkaterinaContreras October 11, 2016 at 1:27 pm hi, i am a small Painting business owner in Raleigh NC, my husband did some work for realtor in Durham NC and the realtor is giving us a run around that she cannot meet us not can she pay us due to supposedly the owner lives in TX now… I want to know what I need to do to end this and move on. I did go to the Century 21( where she works to speak with the owner) they told me that they fired her and there is not much that they can do, she is working now for Remax. thank you.
Reply	Melissa Dewey Brumback December 13, 2016 at 4:42 pm If the work was done at the realtor’s request, you could pursue a claim against Century 21 itself, since they were her employer at the time that she requested the work. You could also sue her personally, but she may or may not have assets.
Reply	Ben Conley September 6, 2016 at 12:20 pm Thanks so much for sharing all the great advice, Ms. Brumback. This is a very informative website. I paid a 50% deposit to a contractor based on our agreement. He performed the work in a substandard manner and didn’t complete all the work in the contract. This work was completed 2 weeks ago.
I refused to pay the rest of his money, but was willing to absorb the initial expense because he obviously spent time on labor. He notified me that he has a lien on my property now. Am I correct in thinking that he must properly serve me, and also file an official lawsuit before this lien is actually valid? I think he might just be trying to scare me.
I filed a small claims “complaint for money owed” for the entire initial payment. Presumably the court could say that I’m out the money I’ve already spent, but I am confident he is in breach of our contract. Was this the right way to ensure I am officially challenging any lien claims, and the proper way to bring a breach of contract claim to civil court? Thanks again. Have a great day.
Reply	Melissa Dewey Brumback December 13, 2016 at 4:36 pm Ben:
Sorry for the delay– I’ve had issues with my email spam filter. Hopefully you’ve had your small claims court action heard and prevailed. If, however, that is not the case, and/or you are in fact still being sued over the lien, be advised that he would have to serve you with papers to perfect the lien (by certified mail, Fed Ex/UPS with signature, or sheriff). If you haven’t been served with papers, the lien will expire on its own without you having to do anything further. If you do get served, you need to file a written response with the Court (and him) within 30 days. (You can get a 30 day extension but have to properly ask the court for it).
Reply	Ben Conley December 13, 2016 at 4:55 pm Thanks for the response. I did in fact prevail in the lawsuit. A week later I got a letter from the contractor saying “Since you won the lawsuit, I will give you 30 more days to pay the rest of the money. Once you have paid in full I will release the lien.”
Thanks to your website I was well aware that there could be no lien. If he lost the lawsuit there wouldn’t be any way to perfect anything. I also confirmed with the court clerk, who was visibly amused by his claim of having a lien in the first place.
Please keep up the good work so we can continue to stay informed on these legal matters!
Reply	Sam Crawford July 9, 2016 at 2:29 pm How long does it take a lien to show up once filed at the Mecklenburg courthouse?
Reply	Melissa Dewey Brumback July 12, 2016 at 2:58 pm It should show up quickly–for title searches, they need the information the day of closing.
Reply	Leslie June 13, 2016 at 11:40 am I subcontract for a company. Now that company does not want to pay me $32,000 that I am owed for labor we did. Would I put a lien on the company or the homes we worked on? Where can I go to put the lien? And would it work to my advantage if I wrote negative reviews saying how they don’t want to pay me or would that back fire on me?
Reply	Melissa Dewey Brumback July 12, 2016 at 3:00 pm Hi Leslie. Yes, if you worked on specific homes you can place liens on those properties, assuming you are the 1st, 2nd, or 3rd tier subcontractor. Be careful of the 120/180 day deadlines involved. The liens are placed in the county where the properties are, usually. (You can file a notice in that county and file in a different county if you wanted to do so). Negative reviews may or may not make a difference, but it will not affect your lien rights one way or another. Just don’t defame them- only state the truth.
Reply	Tessie Brooks June 2, 2016 at 3:46 pm I commented previously & needed to add to it. 🙂 We sent the contractor an invoice on a Fri. 5/27 and they are giving us the run around about paying. The terms on the invoice were 15 days. Can we file a lien on funds before the 15 are up? We are scared this may end in court.
Reply	Melissa Dewey Brumback July 12, 2016 at 3:02 pm Hi Tessie. This was in my spam so sorry for the late reply. You can file a lien on funds at any time- the terms are irrelevant to that. However, you mention (in your other post) that it is a city project. In that case, you are probably looking at making a bond claim instead of a lien claim, as if it is public property you cannot lien it. (Hence, the bond required of the general contractor). You also can simply sue for breach of contract.
Reply	Tessie Brooks May 31, 2016 at 1:32 pm My husband subcontracted a job pouring concrete for a playground that the contractor was awarded by our city. If the contractor doesn’t pay us can we get the city to hold the money to the contractor til the contractor pays us?
Reply	liz g. May 13, 2016 at 9:59 am It all seems so easy; but, we have Writ of Execution and still have no money. The defendant has sold their property to someone else and not paid the debt. Do we just walk up to the new owner with a copy of the writ and say, “Show me the money.”? It is, for many, a small amount (~$600), but for us, it is a lot.. What is the best step and best chance of success?
Reply	Melissa Dewey Brumback July 12, 2016 at 3:14 pm Do you have an order to sell the property, or a Writ for a certain amt of money? In general, if you have filed a lien that you do not perfect, and the property gets sold because the time for perfecting the lien is past, there is nothing you can do. Sounds like you have a writ for a set amt of money but not to sell property to satisfy the judgment. In that case, you ask the clerk of court to send a Writ to the sheriff to serve on the defendant and look for assets– bank accounts, cars, things of that nature. If the sheriff finds something, he’ll seize it for the “sheriff’s sale”. It is relatively inexpensive to have a sheriff execute– last I checked about $30 for the sheriff plus the Writ fee. Good luck!
Reply	liz G. March 9, 2017 at 4:09 pm Thanks for the input. We have a Writ and Sheriffs were unable to collect personal property as everything other than the trailer and land was in someone else’s name (sneaky, huh). The person filed bankruptcy and then failed to follow the courts orders and her bankruptcy was dismissed. Since then, she has sold the property without satisfying the lien. How do I collect from the current owner?
Reply	Melissa Dewey Brumback March 21, 2017 at 3:04 pm Hi Liz– not sure how I missed this post earlier. If you are truly talking about a Writ, that is not a lien actually, and it is against the defendant, not the property. So you’d have to find out where the defendant moved to, and execute on them there. (Through whatever assets/bank accounts/cars/etc they own).
Reply	Lynne May 2, 2016 at 4:34 pm if you own a few properties, can a contractor place a lien on another property even though they did not do any work on the property they are trying to put a lien on?
Reply	Melissa Dewey Brumback May 2, 2016 at 4:45 pm No. A lien has to relate to the property where the work was performed. Now, once a judgment is obtained it “attaches” to any assets so you would have trouble selling other properties while a judgment was against you.
Reply	Susan April 12, 2016 at 4:15 pm A lien has been filed against our property. The address for the GC listed on the lien is not correct. The address actually doesn’t even exist (major typo). Will this lien hold up in court if a law suit is filed to perfect the lien??
Reply	Melissa Dewey Brumback May 2, 2016 at 4:47 pm Possibly not. Depends on whether enough identifying information is there to put the public on notice of the property. Usually in addition to the address a physical description or Book/Page number is provided just for this reason. If, however, the ONLY reference is to the physical address and it is wrong, it would be a good argument that the lien is not valid. You would still need to prove this to the Court’s satisfaction, but you are definitely in a better position than if it were correctly documented.
Reply	erin kinsel April 4, 2016 at 11:03 am Hi, I sued a previous landlord and won a judgement against him. He paid me partially but still owes court costs and interest. I understand that in NC a lien is automatically issued against his property when a judgement is won. I recently received notice (I’m assuming because I am one of several lien holders) from an attorney that they are also seeking a judgement against my previous landlord for county taxes owed.
Do I have to respond to the attorney informing him that I am still a lien holder? If this attorney wins a judgement and they pursue the case to have my landlord’s property put up for auction, do the proceeds go directly to the clerk of courts and I am automatically paid as a lien holder, or do I have to file additional documents? Which lien holder is paid first?
I started the process to have his property seized but he paid me $700 so I let the matter drop. He currently only owes me about $200, so I felt the complicated court process to “get my money” was too much to go through. Now I’m wondering if someone else does the work, can I get the rest of my judgement?
The other lien holder, Ford Motors, has a judgement against him for about $10,000. And he is now being sued by the county for $3000 in back property taxes.
Reply	Melissa Dewey Brumback May 2, 2016 at 4:50 pm It is likely that the attorney that is selling the property for taxes is notifying you that your lien right may be extinguished, unless you want to pay off the taxes in exchange for a first priority on the lien. If he only owes you $200, I’d let it go as you are likely to spend much more money than you will recoup.
Reply	george dixon May 3, 2016 at 7:46 am I just put some salt and pepper, and fried a lien to a nice well done texture, because it would have cost me close to $9,000.00 to recover $5300.00. There would have been no lein if I had READ THE FREAKING CONTRACT!! Just because a contract looks good and you want the product (construction contract) doesn’t mean that you are protected in it. If one of the lead lines is “no amendments to this contract will be accepted” take a red magic marker and write “VOID” across it and send it back. Expensive lesson, well learned.
Reply	Sam March 23, 2016 at 10:40 am I hired a landscaper to do some work on my Yard. He gave me a check list of all the materials and labor and we both signed it. I paid him cash to buy the material and now he is not showing up to my house to finish the work. Every time when I call him or text him he tells me that he is going to come to my house and he doesn’t show up. Can I file a lien against him to pay me back the money he took for the materials? Thanks in advance
Reply	Melissa Dewey Brumback March 23, 2016 at 1:50 pm You can sue him, in small claims court most likely (depending on amt he owes you). But, liens are against real property, so no, you cannot file a lien.
Reply	Sam March 23, 2016 at 4:53 pm Thank you so much Melissa for your help.
Reply	steven September 21, 2015 at 9:59 pm I have someone who has poured concrete out at my house and done a horrible job. I have agreed to pay for materials and they will not charge for the labor. Can I have them sign a document in writing that says this and it be legal? I don’t want them to come back at me after I pay the concrete company for the labor that they done.
Reply	Sally W September 9, 2015 at 4:21 pm We are a plumbing & septic contractor. There are 3 situations where individuals have not paid our company for septic systems installed on property (1 was contracted through a mobile home dealership that is now defunct and 2 contracted directly with individuals). Our company has been awarded recovery by Small Claims Court in the various counties involved. Not knowing what to do next, time has passed and now we are 8 months to almost 1 year later. What can we do?
Reply	Scott Wilson August 31, 2015 at 11:41 am I have 3 projects with a particular remodeler/landscaper that I provided materials for. My time table on two jobs is about to run out. The guy wrote me a check(just over 3000k) and funds are not available. 1800, 700, and 500 are basically amount owed on jobs. What should I do? Not really worth filing lien on two of them, better to go after bad check?
Reply	Melissa Dewey Brumback September 30, 2015 at 3:41 pm There are significant penalties for writing bad checks, so that may be the best option for you to pursue.
Reply	richard July 24, 2015 at 8:43 pm Melissa first thank you for all your hard work on here, next I have a subcontractor on new residential homes I am working for and he refuses to pay me on 3 houses that are complete. What are my options since these are new homes being built by a builder and hes the paid subcontractor and I work under him subbing? This is in Wake county. And how much does it cost to file a labor lien? Thanks, Rick
Reply	Melissa Dewey Brumback September 30, 2015 at 3:45 pm Richard:
Somehow this comment ended up in my spam. Apologies for the delayed response. Even if the person you did the work for was paid, you still may have a claim of lien on the real property itself. (Provided the person you contracted with did not waive his lien rights). And you always have a breach of contract cause of action against the one that you contracted with– you can sue for 3 years after the date of breach. Not quite as powerful as a lien, but definitely something to consider. Hard to put a price on liens sine there are variables that come into play, but generally in the $1k range, give or take. Perfecting the lien costs some more money since you are filing the lawsuit.
Reply	What Architects & Engineers Need to Know about the New Lien Law | Construction Law in North Carolina
Tina June 20, 2015 at 4:58 pm I leased my property to a company (who got investors) for a solar farm. We just closed this past month. I have already received a certified letter from an electrical company (a very large one) that they are placing a lien against my property I assume because someone hasn’t paid them. I had nothing to do with this. How can they legally put a lien against my property? What can I do? I called the person we contracted with and he knows nothing about it, so he says, but says not to worry. Um, ok. The company/investor can’t be reached. Help.
Reply	Melissa Dewey Brumback July 13, 2015 at 3:55 pm Tina:
If someone did work on property owned by you, they can then put a lien on the property since their work benefitted the property itself. As a practical matter, however, if they did work for a leasee only, the lien may only be valid on the lease and not the underlying property. It may take some legal wrangling to get yourself/your property out of the situation, but it should ultimately fall on the leasee and not you. Don’t ignore the paperwork, but realize that you probably will come out okay in the end. If the paperwork you got is just the notice of lien/claim of lien, and not the actual lawsuit, it may be that it gets resolved before the lien is even perfected. If they’ve actually filed the lawsuit, then you need to take action to respond. Let me know if you need assistance.
Reply	Tina June 13, 2015 at 11:31 pm I’m owed some money on the end of a construction contract for a group of condominiums. We overhauled the wastewater treatment system. We worked for the Homeowners’ Association. I’m getting close to my deadline to file a lien, and the HOA is not really responsive to my pleas to meet and get this settled. The county GIS website shows the entire property as on property, not the individual condominium building. The wastewater system is used by all the individual units. The HOA is listed as the owner of that property. If I file the lien on that one property, does it encumber all the individual buildings and units? Should I file the lien on that one property, or is there another way I should go?
Reply	Melissa Dewey Brumback July 13, 2015 at 3:49 pm It is really hard to give specifics, but if the work that you did benefits all of the condo owners, then you should be able to lien against the entire condo property. This would include all individual units.
Reply	Lisa April 8, 2015 at 7:54 pm My company does service calls and renovations for a property management group. The property management company is super slow paying and we have discontinued work. If he doesn’t pay me (Its been 3o days on some properties) can I take out a lien on funds so that he cannot receive funds from the owners until I am paid? Do I have to take out a lien on each individual property?
Reply	Melissa Dewey Brumback May 26, 2015 at 12:55 pm Lisa:
Unfortunately, you’d probably need to take out a lien on each property that you performed work on.
Reply	Jerry March 30, 2015 at 5:20 pm I worked for a guy remodeling a house. Out of $830, he’s paid me $490. It’s been 2 months now and still have not been paid the rest of my earnings. I sent a certified letter to him letting him know that if I wasn’t paid with in a week from the letter that i would send a letter to the owner for collection. So I never heard a response and i sent a letter to the owner were he works. The letter stated that the guy he hired, hired me to help with the project and he refuse to pay me the rest he owed. The letter stated that the owner had 15 days to pay the balance or I would be filing a lien against his property. He never responded and it’s been longer then 15 days. What should I do next?
Reply	Melissa Dewey Brumback March 31, 2015 at 1:44 pm The lien paperwork can be found at the clerk of court’s office, although it has to be done perfectly re: naming the record owner of the property, the legal description of the property, etc. Unfortunately, the amount you are owed versus the amount to perfect a lien makes it difficult. But, the next step is filing the Claim of Lien on Real Property and Notice of Claim of Lien on Funds.
Reply	geevesnc March 3, 2015 at 5:35 pm Thanks for this article. I have filed a lien and just wondered how I need to inform the homeowner. Send them a copy? Or just send them a letter letting them know that a lien was filed against their home? Thanks a ton!
Reply	Julie February 18, 2015 at 1:29 pm We are an electrical contractor in Raleigh NC that just put in brand new service panel. The home owner paid us by check. He then called a week later and said he thought our was was not done properly – we had scheduled the city inspector already to come and sign off on the permit but he told us to cancel it – The city went out anyway and signed off on our job. Yesterday we received a notice from our bank of stopped payment on that check. I would like to know, besides a mechanics lien, can we pursue criminal charges?
Reply	Melissa Dewey Brumback March 3, 2015 at 6:35 pm Criminal charges can only be done through the state. Cancelling a check is not the same as writing a worthless check either. But, you certainly have civil claims against them for not paying you for the work you performed. You would bring the civil claim (unjust enrichment; breach of contract; perhaps even misrepresentation) as part of your lawsuit to perfect the lien.
Reply	Courtney February 12, 2015 at 3:55 pm I am currently living in a house that I am renting. I have an agreement with the owner to make improvements on the property in exchange for a reduced rent. The owner now wants to terminate the lease early, sell the house, and not give me credit or pay for the labor for the renovations. Can I file a Claim of Lien on real Property? The owner is wanting to terminate the lease early (3 years). Can he be required to buy me out of the lease as well if we cannot negotiate?
Reply	Melissa Dewey Brumback March 3, 2015 at 6:37 pm Hi Courtney. The answer is, “it depends.” If you have a written agreement for improvements to the property, and you made those improvements, and he does not pay (via the reduced rent), then you possibly have lien rights. It would be an unusual lien, for sure, and would depend in part on the agreement and facts of your particular case, but it probably could be done. If the owner terminates early, he will have to pay the damages that you incurred because of his breach of contract. These can include actual damages, consequential damages, incidental damages, etc, depending on what the lease says, what you can prove, etc. In short, he probably will owe something, but it really depends on the written agreement. Hope that helps!
Reply	George Dixon February 1, 2015 at 4:34 pm you are an eye-opener, for sure. O-K: I am a commercial plumbing contractor who has problems collecting from two jobs, one from a county emergency dispatch facility, and the other is a contractor who up-built a Panera Bread in Raleigh. Neither will return calls, or e-mails, and I’m within my 120 days to file, but neither one has filed a ‘Lien Agent’ designation. What do I have to do, go to the newspapers?
Reply	Melissa Dewey Brumback March 3, 2015 at 6:38 pm Hi George. If no Lien Agent was designated, you operate under the “old” lien laws. That is, you simply file the lien/notice of lien with the Court, and file the lawsuit to perfect, and serve in the regular manner for lawsuits.
Reply	Jennifer January 7, 2015 at 10:18 am Melissa,
My company was hired through a national company to work on “their” customers homes. It has been a nightmare not only for us but for the customers. The mismanagement of inventory orders have made unrealistic time frames even more difficult to adhere to. The company representative who handled our hiring negotiations is now with holding progress payments from us. I have had to remove my workers from the job sites due to non-payment and have informed their customers of the possibilities of filing a lien. These customers have not yet completed payment through the original contractor. None of the homes have been completed. Would it be advised to go forward with filing a lien to secure payment for work that has already been completed? What can I do to help the customers with the process? I certainly do not wish for them to have any additional stress, I really just want the original company to do what’s right but I need to get paid and to pay my employee’s. Thank you
Reply	Melissa Dewey Brumback March 3, 2015 at 6:44 pm Jennifer:
If you are not getting paid timely, your options are to file a lien, sue the national company (with or without filing a lien), or terminate your services. The lien, obviously, has the most bite, as if the homeowners are still paying the national company, and the national company is not paying you, the homeowners will be upset and your invoices will become a pressing concern for everyone.
Reply	Leslie December 1, 2014 at 10:17 am We had a new roof put on our home in August. We went through our insurance company because of defective shingles and hail damage. The roofer was paid in full on 9/9/14. After he was paid he said that he was having problems with his supplier and that some of his customers were getting letters regarding a lien. On 11/10/14 we received a claim of lien on real property filed by the roofing supply company saying we owe 4,228.31. plus 634.00 in att. fees. The roofer said he was taking care of it. On 11/26/14 we received a civil summons alleging that the “plaintiff is informed and believes and alleges that” the defendants currently retain funds owed to them. Again, our bill was finalized 9/9. What should we do? If we appear in court with verification that we paid the roofing contractor in full prior to being notified of any claim of lien, will this be enough. How do we get the lien removed?
Reply	Pat November 8, 2014 at 5:48 am Home owner fired me after I was in an accident and could not finish his home on time, I was the GC. He took me to court and successfully won a lien against me of $130K for work he had to finish. I was completely debilitated for several months, on strong drugs and did not respond to lien (was in an accident in a county across the state). He took possession of my truck and tools left at the job site and they were sold at a sheriff’s auction. I have not paid the lien and it has been almost 7 years. He has not attached any subsequent wages from my jobs. I work for other people now, not as a GC. I would like to buy a home and get back into the GC business. Can he attach a lien against my home and/or prevent me from performing work as a GC? My license expired in NC so I’ll have to reapply for a GC license. I don’t own anything with my name on it.
Reply	Melissa Dewey Brumback November 18, 2014 at 5:08 pm I’m sorry to hear of your troubles. Regarding your question, it depends on whether or not the judgment against you is still active. He may have sold enough of your equipment to have satisfied the judgment, in which case it would be (or should be) satisfied. But if it was only 7 years ago, technically he can come back and “attach” assets to sell for up to 10 years (and an additional 10 if he follows certain procedures). However, if you are going to be getting a mortgage to buy the home, the mortgage will make sure that they, and no one else, are first priority on the loan. They may require certain hoops for you b/c of the judgment, but if they are satisfied that they will take 1st position on your mortgage, there really would not be an ability for the owners/creditors to get that property. The real question will be what the bank requires to give you a mortgage. They can’t prevent you from working as a GC- that’s entirely up to the GC board. The GC board does, of course, have certain financial requirements that you have to meet.
Reply	Pat December 1, 2014 at 11:11 pm Thank you for your reply. I don’t know if the lien is still active. Can I do that research myself or should I have an attorney do it for me? If I work as a GC in NC, can the person go after any other home I may build to satisfy their lien against me? Your answers were very helpful and I appreciate the time you took to reply to my posting.
Reply	Melissa Dewey Brumback December 2, 2014 at 11:07 am If working as a GC, someone with a judgment against you cannot simply go after a house you are building for someone else. If, however, it is a house you own, on land you own, then yes they could go after it. If you are simply building a house for a homeowner, they couldn’t get any sort of lien or anything on that house.
A judgment is good for 10 years in NC, then it can be renewed for another 10 years IF certain procedures are followed. If it is still in the first 10 years, you could check to see if the judgment was listed as “satisfied” at the courthouse (check the judgments book). If so, then you have no worries. If it is only “partially satisfied” or it doesn’t say, then it still is technically valid. To go after your individual assets, they’d need to give you a notice of rights (by sheriff or certified mail) first, so you know they plan to re-execute on you. You cannot stop them, but you can fill in the notice of rights to claim certain exempt properties from execution. If you haven’t gotten a notice of rights in the past couple months, then any execution efforts are either not happening or a ways off. (Sometimes people like to try to re-execute every year or two while the judgment is good).
Reply	Thanh Huynh November 6, 2014 at 10:32 pm Hi Melissa – just found your web site. I hired GC to replace the roof. I paid half amount so GC can start. GC complete the new in mid August. GC hired subcontractor to do the roof and the roof was leaking after the first rain. Subcontractor came and fix the roof and repaired the ceiling by the end of August and emailed me that GC did not pay him so he will file Lien on Property to my house by the end of September if he will not pay in full. I received the Lien on Real Property filed by subcontractor on 10/01/2014. By contracted with GC I paid GC the final payment after received the Full Unconditional Waiver. Juts couple days ago I received the Notice Claim Lien upon Property from subcontractor prepared by an attorney. Did I do wrong when paid GC the final payment?
Reply	Melissa Dewey Brumback November 18, 2014 at 5:11 pm Hi Thanh. No, if you were not served with the notice of lien before you paid the GC, then you did nothing wrong. It is only if you pay after getting notice of the lien that you have problems. A phone call or email stating that “he will file” doesn’t count as the notice. So it sounds like you are okay. I’d send a copy of your waiver to the attorney and explain that no funds are due or owing. That *should* resolve the issue, but the lawyer may want further documents etc as well. But sounds like you are in good shape.
Reply	DC December 23, 2013 at 5:50 am We are 6 months past having closed on a new house but still managing completion of various punch list items. The builder’s electrician just cancelled an appointment to complete those items, saying that the builder owes his company tens of thousands in past months overdue payments. Since the electrician (and any other subcontractor) has done punch list work on our house post-closing, is there any way they can put a lien on our property because of money our builder owes them for this or other jobs?
Reply	Melissa Dewey Brumback January 3, 2014 at 4:16 pm If the work performed was within the lien period (120/180), than the subcontractor can file a lien. His lien would, however, be based on what is owed by you to the General Contractor. If you have paid all sums due (and have proof), then the lien claim would ultimately be unsuccessful. Also, the lien on your property can only be for the work done to improve your property, not for work done elsewhere.
Reply	kevin December 19, 2013 at 9:50 am What is the form called and where can I get it to file The Notice of Claim of Lien in Charlotte, NC?
Reply	Melissa Dewey Brumback January 3, 2014 at 4:17 pm There is no form per se. The statute tells you what you need to include. You can also go to the courthouse and view previous liens as go-by examples.
Reply	Henry August 21, 2013 at 2:34 pm Thanks for your advice…
I’m a homeowner who contracted with a general contractor for a master bath renovation. The 3 wk. estimated timeline, has turned into almost 3 months. The GC has blamed the various sub contractors for the delays (tile, glass, granite, cabinetry, etc.). We’re finally on the home stretch, and he’s got one more visit to fix some issues, and we’ll consider the project complete, and issue the final payment (just over $5k). Unfortunately, we’ve been contacted by 2 of the subs (via phone and note on the door) that they have not been paid. In the phone conversation, sub alluded to a lien, but requested we contact him first, before making the final payment.
What should we do? I haven’t been informed of a Notice of Claim of Lien upon Funds, so as far as I know, nothing formal has been pursued…but how do I know when it’s safe to issue final payment to the GC and be done with this project?
Reply	Melissa Dewey Brumback September 11, 2013 at 7:25 pm If you’ve not gotten a Notice of a lien, then you can proceed to pay the builder. However, to save yourself some headache, you may want to go ahead and issue a joint check to the builder and the subcontractor involved, or hold the money until the builder presents lien waivers from his subcontractors. If the project was started (permit pulled) after April 1, 2013, then anyone wanting to file a lien first needs to file a notice of working on the house– have you gotten any of those?
Reply	Merv Budge July 8, 2013 at 9:21 pm We had a condo owner that has failed to pay COA dues for several months. She subsequently filed for bankruptcy, which was granted. She named our COA as a creditor. We received a form from the bankruptcy court that says we cannot take action against her for dues. However, can we place a lien on the condo with the hope of collecting our back dues at the time the condo is sold? Our declarations and bylaws say we can place a lien on the property if dues go unpaid for a long time. The condo is in North Carolina and the COA is incorporated in North Carolina.
Reply	Melissa Dewey Brumback July 18, 2013 at 9:24 am This is a great question, but unfortunately one for a bankruptcy lawyer. The laws concerning bankruptcy are very specialized and I do not feel qualified to comment. If you need a referal to a bankruptcy lawyer, let me know.
Reply	Jo F. June 9, 2013 at 11:50 am Is a Real Estate agent considered a contractor?
Reply	Melissa Dewey Brumback June 13, 2013 at 3:54 pm No, sorry!
Reply	ceith halipilias March 25, 2013 at 3:07 pm Thankyou so much for this…Does these statutes also apply to tree work that is contracted from the owner not associated with construction. Trimed, cut and removed 9 trees from property at verbel agreement…Thankyou
Reply	Melissa Dewey Brumback March 28, 2013 at 4:56 pm Hi and thanks for your comment. Yes, liens can be applied in the situation you described, as it is work done to real improve/maintain real property.
Reply	Russell February 3, 2013 at 10:12 pm Melissa
I have a Repair & Maintenance contract on a property. And the owner owes
for several months for repairs and maintenance work. Can I file mechanics lien to recover the funds I am owed.
Reply	Melissa Dewey Brumback February 5, 2013 at 3:18 pm In NC, repairs fall under the definition of improvements to real property, so you could file a lien if you are within the proper timeframe (i.e., 120 days from last service to file notice; 180 days from last service to perfect in NC).
Reply	Justin September 13, 2012 at 3:16 pm I may be missing an obvious section of law regarding this, but failing to find it, I thought I’d pose my question to you. How do liens work in regard to public property/projects? Can you even file a Claim of Lien on Real Property or a Subrogated Claim in such a situation? I mean, I can’t see the court ordering a school district to sell a school to pay a contractor or subcontractor. If you can, then who would be considered the owner (using a school as the example)? If you cannot, then outside of a filing Notice of Claim of Lien upon Funds with the obligor (though the question of owner still rears its head), what can you do? Understanding the generic nature of my question, I only expect a generic answer.
Reply	Melissa Dewey Brumback September 14, 2012 at 2:09 pm Justin:
Good question. You are absolutely correct- you cannot “lien” public projects. If a public project is federal, you have what is called a Miller Act claim. If the project is state or local, you have a Little Miller Act claim. Essentially, these Acts force general contractors on government projects to obtain payment and performance bonds. These bonds are for the benefit of subcontractors, since they cannot place liens on government property.
Reply	Patti July 3, 2012 at 10:40 am Melissa,
Thank you for the time you put into this blog. I’m currently trying to help a subcontractor that has run into some hard times as many people have during these very difficult economic times. This young man cannot afford an attorney so I am trying to do a good deed by trying to help him recover money owed to him. I’ve never had reason to file a lien but I offered to research the process and help walk him through it. He was a first tier subcontractor and the GC didn’t pay him the last payment he was due. We’re hoping we’re following the correct steps and not making any mistakes.
1)We drafted the Liens
2)He verbally notified the GC that he would be filing a lien.
3)He filed a Claim of Lien on Real Property G.S. 44A-12 and a Notice of Claim of Lien Upon Funds by First Tier Subcontractor G.S. 44A-19 pursuant to G.S. 44A-23. I’m hoping this was correct since he’s not the GC.
3)He filed it immediately after refusal to pay, Date labor last furnished was 5/21/12, date filed 5/24/12 in the county where the real property is located.
4)He mailed a copy of the stamped and filed liens to the owner of the real property and the GC on the date of filing 5/24/12. Should he have served before filing?
He has still not been paid and I’m stumped on how to perfect the lawsuit. He still has 5 months time left but he could really use the money. The amount is under $5,000. Does he perfect the lien with a lawsuit through Small Claims Court or a different lawsuit. I can’t seem to find this answer clearly on-line.
Reply	Melissa Dewey Brumback July 3, 2012 at 7:39 pm Everything you mentioned sounds good, so far. You perfect a lien through filing in either District or Superior Ct. I would not recommend Small Claims Court, as (1) everything is appealable to District Court; (2) you are going to be asking for permission to sell the property subject to the lien, which is something I’m not sure they can even grant; and (3) magistrates would likely punt this in any event. Since the amt is $5k, I’d file in District Court. [THe ususal caveats apply–I’m only giving general information based on what you presented to me as the facts; I’m not your lawyer; etc etc]
Reply	Chris February 22, 2012 at 9:40 pm Melissa, thanks, all your blogs provide excellent practical advice. my question is on priority of interests. Do claim of liens on funds prime previously existing perfected security interests of banks. More specifically, if a subcontractor files a lien on funds against a contractor, does that lien come ahead of a bank’s perfected security interests on the assets of the contractor even if the bank’s security interests were filed before the subcontractor started performing any work for the contractor? And if so, are there some circumstances where the liens do not prime the bank’s liens?
Reply	Melissa Dewey Brumback February 22, 2012 at 9:51 pm Thanks, Chris, for your comments. Great question! Generally, it is first come, first served. That is, if the lien wasn’t filed until after the bank’s security interest is perfected, the lien will be in second position. However, if the contractor did work (date of first work) prior to the bank getting its interest, that becomes stickier. Claims of lien on funds can pre-date a bank’s security interest. Usually the bank will ask the owner to indemnify them from such claims, bond off any known liens, and/or have the owner get all (known) contractors to sign a subordination agreement. The bank wants to be in #1 position. If a bank loan is being used to purchase the property it generally gets first priority. But if a lien is already in place, the bank in some cases is stuck with it. This is actually a very complicated area of the law because of the competing interests, and several appellate cases on the issue. For example, if the owner re-finances with a different lender, is that lender stepping into the shoes of the first lender, or does he lose priority since he came later? So, it really depends on the exact facts of a particular case.
Reply	Renee September 26, 2011 at 1:13 pm You write that those who “provide services related to improvement of real property, contractors, and subcontractors (down to the 3rd tier)” are able to file a lien. As a general contractor, I paid in full the subcontractor who installed tile floors, showers and backsplashes in a custom house. I then received a Claim of Lien which was filed by the person who actually did the work. It seems the the subcontractor I hired had subbed the work to someone else (a 3rd tier subcontractor?). What recourse do I have?
Reply	MelissaBrumback September 26, 2011 at 1:25 pm Renee:
Thanks for your comment. If you paid your subcontractor in full, then the fact that the subcontractor sub’d it out again should not matter to you. You’ve undoubtedly received a Notice of Claim of Lien on Funds plus a Claim of Lien on Real Property. If you’ve met your obligations to the party you contrated with, and do not owe that party more money, then they cannot successfully go after you. If, however, you still owe any money (at all) to your sub, you cannot pay that money to them until the lien issues with their subs are resolved. It is possible that the sub-subcontractor also has claims on the real property, but that is an issue for the owner and not for you as G.C. Did you get a lien waiver from your sub when you paid him? If so, that should also protect you from claims of the sub’s sub.
Reply	John July 15, 2011 at 4:17 pm Melissa, thanks for maintaining this site I find it very informative. I have a question: Do you know if non-licensed consultants are eligible to file a lien against real property in NC. I am an environmental consultant and provide a variety of services to land developers such as wetland delineation, permit preparation, erosion control consulting, and assistance with a variety of water quality related regulatory issues. Would these services be considered labor? Would an environmental consultant be considered “any person who performs labor”?
Reply	MelissaBrumback July 19, 2011 at 5:03 pm John:
Thanks for your comments. You raise an interesting question about non-licensed consultants. Under the statute, “Improve” means to build, effect, alter, repair, or demolish any improvement upon, connected with, or on or beneath the surface of any real property, or to excavate, clear, grade, fill or landscape any real property, or to construct driveways and private roadways, or to furnish materials, including trees and shrubbery, for any of such purposes, or to perform any labor upon such improvements, and shall also mean and include any design or other professional or skilled services furnished by architects, engineers, land surveyors and landscape architects registered under Chapter 83A, 89A or 89C of the General Statutes, and rental of equipment directly utilized on the real property in making the improvement. It appears that your work would *likely* not fall under that definition, absent some physical improvement itself on the real property; i.e., actual marking in the field or some such. (Nothing is absolute in the law, and an argument could be made that you do fall under it). However, even without a lien right, you can always sue under a breach of contract theory. Call me if you want to discuss further.
Reply	Michael February 21, 2011 at 9:20 am Melissa,
Thanks for the very helpful info! I was wondering, what rights does someone have if a lien has been falsely placed against them? I brought my car into an autobody shop after an accident to get an insurance quote. When I brought in the car it had body damage but was driveable. I got the insurance check and the owner of the shop called me and told me that I needed to come in and sign the check over to him. I told him that I wanted to pick up my car and drive it because I was not sure how many of the repairs I wanted to do and when due to my own financial situation. He told me that the car was no longer driveable because they had taken so much of it apart for the insurance quote. I was shocked that they would do this! He told me that he needed me to come in and give him money immediately so they could order parts. I explicitly told him that I did not want him to order any parts or do any work on the car. He called me back a few days later and very aggressively told me that I needed to come in and sign a contract with him and give him money to buy parts. I told him that I was not happy with the way they were dealing with me and that I just wanted my car back at that point. He told me that they had already ordered parts for the car the day after I told him not to! And that if I wanted my car back that I would have to pay a “30% restocking fee” on the price of the parts to get my car back. Now he is telling me that he is going to put a Mechanic’s Lien against me/my car for the 30%!
What are my rights and what can I do about this sleeze who is obviously trying to shaft me? Thank you,
Reply	MelissaBrumback February 21, 2011 at 9:38 am Michael:
Thanks for commenting. Mechanics liens and real property liens are somewhat different creatures, and I don’t have any experience with mechanics lien issues. However, you might want to call Legal Referral Service line at 919-677-8574 and have them set you up with a half hour consultation with someone who has expertise in that area of law. Good luck to you.
Reply	Will North Carolina Be Changing It's Mechanic Lien Laws? | Construction & Mechanics Lien Blog
Scott Wolfe November 13, 2010 at 9:05 pm Hi Melissa – Great primer on the construction lien laws in North Carolina. It gives a great baseline understanding of what a lien does, what type of instruments are available for filing in North Carolina, and the like. Will be mentioning on my Construction Lien Blog. Would you like to re-work this (slightly) and have it published on our blog as a guest post? I think that this would make a great post for our audience.
Reply	MelissaBrumback November 15, 2010 at 1:04 pm Scott–
Thanks for the comment and your future mention. Would love to talk re: guest post. Drop me a line (mbrumback@rl-law.com) and give me more details on what you are looking for.
Reply	Ashley Campbell November 11, 2010 at 10:25 am Great post, thank you! For a lien novice like me, it was very informative. Also, love the souffle photo!
Reply	MelissaBrumback November 15, 2010 at 1:03 pm Sure thing, Ashley! Thanks for reading.