North Carolina Lien Rights for Contractors, Subcontractors and Design Professionals

All contractors, subcontractors and design professionals who are interested in increasing their chances of being paid for their work need to be able to assert their lien rights.  Often having a valid lien in place is the only difference between getting paid in full and not getting paid at all.  It is almost always good practice for those working on or supplying materials or designs to construction projects to secure and protect their lien rights.

What is a lien and who can file a lien?

When a contractor, subcontractor or design professional performs work or supplies materials, a lien helps secure their right to be paid for their work.  Design professionals, contractors and subcontractors who provide services, labor, or materials to improve real property can file liens.  Lien rights are important and are protected by the North Carolina Constitution.  (N.C. Const. art. X, § 3.)

What are the advantages of filing a lien?

Filing liens and preserving the right to file a lien will help contractors get paid.  Banks routinely understand the value of liens in the home loan business and would never loan money without filing a mortgage lien to help secure payment.  Similarly, contractors and design professionals should preserve their lien rights and file liens when appropriate.  Specific notice, recording, and foreclosure procedures set out in the North Carolina statutes must be followed to file a lien.  In exchange for following these procedures, a lien claimant can gain the following benefits:

Liens are very powerful tools to ensure that design professionals, contractors and subcontractors recover money owed to them for work that they completed on a project.

What types of liens are there in North Carolina?

Design professionals, contractors and subcontractors may file three types of lien:

When and Where must a lien be filed in court?

Lien claims must be filed in the clerk of court where the property is located, within 120 days of the lien claimant’s last date of furnishing labor, materials or services.

Does a lawsuit need to be filed?

Yes, to enforce the lien a lawsuit must be filed within 180 days of a lien claimant’s last date of furnishing labor, materials or services.

Are there any disadvantages to filing a lien?

A properly filed lien has few disadvantages.  An improperly filed lien, however, can lead to a loss of your lien rights.  Courts will enforce every legal requirement associated with properly filing a lien, which can lead to harsh and unforgiving results.  For example, if you miss the filing deadline by just one day, you lose your lien rights.  When it comes to liens, knowledge is not only power, it’s a necessity.

The attorneys at Skufcalaw are familiar with North Carolina’s lien laws and are able to help contractors and design professionals secure their lien rights.

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