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Are You Eligible to File a Mechanics’ Lien in North Carolina?

At some point in your construction career, you will be awaiting payment from an owner. This is simply a fact of life in construction. When a contractor, subcontractor, supplier, or any other type of construction professional is owed compensation, they have to consider their options for seeking payment. The mechanics’ lien is arguably the most effective legal device a professional can utilize in order to seek payment; however, the requirements to qualify for a lien, let alone file one, vary in every state and depend on a lot of other factors, including your position on the project, the type of project you’re working on, and the timing in which you filed a lien and other documents.

Everyone deserves to be compensated for their hard work, especially construction professionals who put their blood, sweat, and tears into a project. If you are owed compensation for your work, and the owner won’t budge, speak with a Charlotte construction lien attorney from Cotney Construction Law. Successfully applying a mechanics’ lien is a highly complicated process. In order to preserve your lien rights, your payment dispute requires the attention of a construction attorney who is highly experienced in lien law in the Tar Heel State.

Related: The Basics of North Carolina Lien Law

Understanding Lien Law in North Carolina

North Carolina does allow construction professionals access to a few different types of construction liens; however, understanding the nuances of each lien option can be tricky. Here is some more information on the two most common forms of construction liens:

Claim of Lien on Real Property   

If you are a general contractor or architect who contracted directly with the owner, you have the right to file a Claim of Lien on Real Property in North Carolina. Generally, this traditional form of a mechanics’ lien must be filed within 120 days of the final date that labor or materials were last furnished. Because most subcontractors do not enter into an agreement with an owner, they do not qualify for a Claim of Lien on Real Property (unless they have a right to file a Subrogated Claim of Lien on Real Property). If you’re a first, second, or third-tier subcontractor, consult a Charlotte mechanics’ lien attorney to learn more about your options for collecting payment. 

Notice of Claim of Lien Upon Funds

As we discussed above, qualifying for a Claim of Lien on Real Property in North Carolina is largely contingent on your construction contract. Entities that didn’t enter a direct contract with an owner will want to explore the option of filing a Claim of Lien on Funds. This legal device is often used if a subcontractor is owed compensation from the general contractor. In other words, the owner is prevented from paying the general contractor, who hasn’t yet paid the subcontractors. A Claim of Lien on Funds is available for all construction professionals. 

Related: Speak with a Lien Attorney in North Carolina

Other Considerations for North Carolina Mechanics’ Liens

Determining whether or not you have the right to file a mechanics’ lien on real property in North Carolina comes with many additional factors. Generally, if you’re a subcontractor who did not enter into a direct contract with the owner, you cannot file a traditional mechanics’ lien on real property; however, you can file a lien upon funds or you may have a right to file a subrogation lien. 

To make matters even more confusing, some types of lien require the construction professional to send notice to the owner or general contractor, whereas other liens are required to be filed with the county. Moreover, North Carolina lien law has experienced significant changes in lien requirements in recent years, including the additions of House Bill 1052 and Senate Bill 42. Construction professionals need to make certain they are up-to-speed on the latest legislature, especially in The Tar Heel State. 

At Cotney Construction Law, a construction lawyer in Wilmington, NC, can answer any questions related to mechanics’ lien requirements in North Carolina. We also offer construction firms the opportunity to invest in a comprehensive subscription plan. This unique opportunity allows construction firms to take advantage of unlimited lien and bond claims for all your projects at an affordable and fixed monthly budget. 

If you would like to speak with a contractor attorney in Wilmington, NC, please contact us today.

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.