Notice of Subcontract - Corporation
Note: This summary is not
intended to be an all inclusive discussion of North Carolina's construction
or mechanic's lien laws, but does include basic provisions.
What is a construction or mechanic's lien?
Every State permits
a person who supplies labor or materials for a construction project to
claim a lien against the improved property. While some states differ
in their definition of improvements and some states limit lien claims to
buildings or structures, most permit the filing of a document with the
local court that puts parties interested in the property on notice that
the party asserting the lien has a claim. States differ widely in
the method and time within which a party may act on their lien. Also
varying widely are the requirements of written notices between property
owners, contractors, subcontractors and laborers, and in some cases lending
institutions. As a general rule, these statutes serve to prevent
unpleasant surprises by compelling parties who wish to assert their legal
rights to put all parties who might be interested in the property on notice
of a claim or the possibility of a claim. This by no means constitutes
a complete discussion of construction lien law and should not be interpreted
as such. Parties seeking to know more about construction laws in
their State should always consult their State statutes directly.
Who can file a lien in this State?
Any person who performs
or furnishes labor or professional design or surveying services or furnishes
materials or furnishes rental equipment pursuant to a contract, either
express or implied, with the owner of real property for the making of an
improvement thereon shall, upon complying with the provisions of this Article,
have a lien on such real property to secure payment of all debts owing
for labor done or professional design or surveying services or material
furnished or equipment rented pursuant to such contract.
How long does a party have to file a lien?
Claims of lien may be
filed at any time after the maturity of the obligation secured thereby
but not later than 120 days after the last furnishing of labor or materials
at the site of the improvement by the person claiming the lien.
What kind of notice is required prior to filing
a lien?
Subcontractors are required
to provide the obligor with a Notice to Obligor. This notice is slightly
different depending on whether the party issuing the notice is a first,
second, or third tier subcontractor, or is more remote.
How long is a lien good for?
An action to enforce
the lien created by this Article may be instituted in any county in which
the lien is filed. No such action may be commenced later than 180 days
after the last furnishing of labor or materials at the site of the improvement
by the person claiming the lien.
Are liens assignable?
Yes. North Carolina
law specifically permits the assigning of liens. When a claim of
lien has been filed, it may be assigned of record by the lien claimant
in a writing filed with the clerk of the superior court who shall note said
assignment in the margin of the judgment docket containing the claim of
lien. Thereafter the assignee becomes the lien claimant of record.
Does this State require a notice prior to starting
work, or after work has been completed?
No. North Carolina
statutes do not require a Notice of Commencement or a Notice of Completion
as required in some other States.
Does this State permit a person with an interest
in property to deny responsibility for improvements?
No. North Carolina
statutes do not have a provision which permits the denial of responsibility
for improvements.
Is a notice attesting to the satisfaction of a
lien provided for or required?
No. North Carolina
statutes do not provide for or require that a lien holder who has been
paid produce or file a notice to that effect. However, two methods
under which a lien may be discharged include an acknowledgment of satisfaction
of lien which may be filed by either the lien claimant or the property
owner with the lien claimant's signature.
Does this State permit the use of a bond to release
a lien?
Yes, whenever a sum equal to the amount of the lien or liens claimed is deposited
with the clerk of court, to be applied to the payment finally determined
to be due, whereupon the clerk of superior court shall cancel the lien
or liens of record and whenever a corporate surety bond, in a
sum equal to one and one fourth times the amount of the lien or liens claimed
and conditioned upon the payment of the amount finally determined to be
due in satisfaction of said lien or liens, is deposited with the clerk
of court, whereupon the clerk of superior court shall cancel the lien or
liens of record.
