Every state has unique requirements for contractors, subcontractors, and material suppliers that want to enforce a mechanics’ lien against an owner who refuses to pay. Therefore, it’s vital that contractors become intimately familiar with lien laws in their state, especially in states with complex lien laws like North Carolina. Unfortunately, it’s hard to comprehend the full scope of North Carolina’s lien laws without first building familiarity with the terms commonly tossed around during the lien process. If you want to file a successful mechanics’ lien in the Tarheel State, you’ll have to speak the language of the law first.
In this article, a Charlotte construction lawyer from Cotney Construction Law will discuss eight terms that the North Carolina Bar Association (NCBA) Foundation has deemed “important.” As a contractor, it’s imperative that you have a solid understanding of the lien process so you can avoid taking inadvisable actions before consulting an experienced Charlotte construction law firm for assistance.
1. General Contractor
Any individual or business that contracts directly with the owner for the improvement of real property is considered a general contractor. Typically, this means you’ll interface with the owner in a face-to-face manner and control high-level decision making to ensure that provisions of labor and materials are being handled properly.
Individuals and businesses that have a contract with the general contractor to provide provisions of labor or materials to the improvement of real property are categorized as subcontractors. These workers don’t interface with the owner, but still maintain mechanics’ lien rights.
Another term for “owner,” the obligor maintains ownership of the real property that is being improved by the general contractor and any subcontractors. They finance the project and retain ownership upon completion.
4. First Furnishing
The date upon which the general contractor or subcontractor contributes their first provision of labor or materials. This date is important for establishing lien deadlines and should be recorded for use by contractors at all levels.
5. Last Furnishing
The date upon which the general contractor or subcontractor contributes their final provision of labor or materials. This is another important date for establishing lien deadlines and should be verified through documentation.
Merriam-Webster defines subrogation as “the assumption by a third party of another’s legal right to collect a debt or damages.” In other words, when the subcontractor is authorized to pursue the owner as a general contractor would, subrogation has occurred.
7. Lien Agent
An entity, typically a title insurance company, that is permitted to receive and track notices of potential lien claims issued by contractors and subcontractors.
8. Perfecting a Lawsuit
In North Carolina, a lawsuit is required to enforce a lien against an owner within 180 days of the claimants last furnishing of provisions of labor or materials.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.