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Welcome to a Discussion of Legal Issues Facing North Carolinians

This blog does not create an attorney client relationship. You should not rely on this information for advice. If you have a legal question you should contact an attorney.


Tuesday, January 8, 2013

Mechanic's and Materialmen's Liens

One of the most important legal remedies available to contractors and subcontractors is the right to file a lien.  Liens serve a variety of functions, the most important of which is 1) to put the owner on notice that you have not been paid, 2) to make a secure claim for payment.

Filing a lien in state court requires paying a nominal fee and serving the interested parties.  It is very important that liens are timely filed and that all filed documents contain accurate information. Unlike many things filed in state courts, a lien cannot be amended. Instead, in the event of an error, you must file a new lien and run the risk of filing too late. In North Carolina, you must file a lien within 120 days of the last substantial work on the property.

Failure to follow the strict guidelines imposed by your governing statutes could mean losing your lien rights. Often times the modest cost of hiring an attorney to file a lien can mean the difference between tens of thousands of dollars and nothing.  If you are a sub and your contractor files bankruptcy or becomes insolvent, a timely filed lien on funds and a lien on real property can salvage your business.  If money is owed to your contractor and you have not been paid, a lien directs the owner to make payment to you before paying the contractor any additional funds.

Second and third tier subs have similar remedies.

This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.