North Carolina
Mechanics Lien & Notice FAQs

It’s easy to file North Carolina mechanics liens with zlien, the web’s leading all-in-one mechanics lien compliance manager and security platform. Plus, the zlien platform can help you prepare and file mechanics lien cancellations, preliminary notices, and more. To learn more about North Carolina’s mechanics lien law, read the frequently asked questions below.

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North Carolina

Preliminary Notice Deadlines
15 Days

Notice to Lien Agent required within 15 days from first furnishing labor and/or materials.

North Carolina

Mechanics Lien Deadlines
120 Days

Lien filed and served within 120 days from last furnishing labor or materials, and enforced within 180 days after last furnishing labor or materials.

File your North Carolina lien online now.

North Carolina

Preliminary Notice Deadlines
15 Days

Notice to Lien Agent required within 15 days from first furnishing labor and/or materials. Notice of Subcontract if Notice of Contract Filed by Prime Contractor.

North Carolina

Mechanics Lien Deadlines
120 Days

Lien filed and served within 120 days from last furnishing labor or materials, and enforced within 180 days after last furnishing labor or materials.

File your North Carolina lien online now.

North Carolina

Preliminary Notice Deadlines
15 Days

Notice to Lien Agent required within 15 days from first furnishing labor and/or materials. Notice of Subcontract if Notice of Contract Filed by Prime Contractor.

North Carolina

Mechanics Lien Deadlines
120 Days

Lien filed and served within 120 days from last furnishing labor or materials, and enforced within 180 days after last furnishing labor or materials.

File your North Carolina lien online now.

Calculate your deadline with the Payment Rights Advisor >

How to File a North Carolina Mechanics LienFree How-To Guide Available

We have a comprehensive guide available to with step-by-step instructions to help you file a North Carolina mechanics lien. Simply click the button below to download your free copy.

 

Free Download - North Carolina Mechanics Lien Guide


North Carolina contractors are required to send a Preliminary Notice before a Mechanics Lien

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North Carolina Frequently Asked Questions

North Carolina Mechanics Lien FAQs

In North Carolina, “any person who performs or furnishes labor or professional design or surveying services or furnishes materials or furnishes rental equipment pursuant to a contract . . . with the owner of real property for the making of an improvement thereon” has a right to file a claim of lien on real property. However, lien rights in North Carolina are tricky for subcontractors.

Parties that may file a lien against the real property are: 1) party contracting directly with the owner; 2) first tier sub [provided all necessary steps are followed]; 3) first, second, or third tier sub provided the requirements for a claim against funds are complied with, and b) the owner pays the general or higher-tiered sub anyway and does not hold out enough to cover liens; 4) second or third tier subs (and suppliers) through subrogation of the GC’s lien even if the first-tier sub has been paid, when the owner still owes money to the GC and the GC has lien rights – this can be limited if the general files a notice of contract and second or third tier sub does not serve a notice of subcontract; or unless, if both notices are given, the general serves written notice of payment with 5 days of receiving payment.  A recent case also just confirmed expansive mechanics lien rights for design professionals.

Parties that may file a claim on funds: a subcontractor may claim a lien against funds owed to their hiring party (the party on the tier above) and may also be subrogated to that party’s claim.

Parties more remote than a second tier sub may not be subrogated to higher subs’ interest.

Parties may not file a claim against funds when no funds are owed to the higher tier party at the time the lower tier party files the claim of lien.

Another nuance about who can file a mechanics lien was recently analyzed by the North Carolina Court of Appeals in a controversial decision that invalidated a mechanics lien because the parties contracted with a party to do the work who at the time work began was not the actual owner of the property, but only later became an owner. To qualify for a lien pursuant to the law of this case, therefore, you must contract with someone who has an immediate interest in the property being improved. See discussion of this case, John Conner Construction, Inc. et al v. Grandfather Holding Company, Inc., et al in our blog article: North Carolina Mechanics Lien Invalidated Because Court Confused About Term “Owner”

In North Carolina, a mechanics lien must be filed after the debt becomes due, but within 120 days from the date of last furnishing labor or materials to the project. If the claim is upon funds, notice may be given at any time a claim against the property may be filed, but earlier is better as it requires the obligor to withhold funds for the claimant’s benefit.

Yes. A claim of lien on real property is required to be served on the owner of the property as well as filed in the Office of the Clerk of Superior Court in the county in which the property is located. A subcontractor must also serve the general contractor with a copy of the lien. The mechanics lien is not perfected until the lien is both filed and served on the owner (and, if required, the general contractor). This means that the lien must be both filed and served prior to the expiration of 120 days from last furnishing labor and/or materials to the project.

A claim of lien on funds is not required to be filed (unless attached to a lien on real property), but is required to be sent by certified mail to the parties “up-the-chain” from the lien claimant. If the obligor is a corporation, the claim must be addressed to the attention of an officer, director, or managing agent.

No. In North Carolina, the amount of the mechanics lien is determined by the unpaid amount of labor, material, and/or equipment furnished to the project. Interest and indirect or consequential damages are not allowable in the lien claim. Attorney’s fees may be granted to the prevailing party at the discretion of the judge if the losing party unreasonably refused to resolve the matter.

In North Carolina, an action to enforce a mechanics lien against real property must be initiated within 180 days after the date of last furnishing labor or materials to the project. This means that, potentially, a lien claimant could only have 60 days from the filing of the lien until an action to enforce it must be initiated.

There is no specific provision setting the time period in which an action to enforce a lien against contract funds must be initiated.

The foreclosure action itself must meet all the technical requirements of the lien laws, as demonstrated by a recent case that invalidated a mechanics lien because, since a property was sold and ownership changed, the parties were not properly named in the foreclosure action.  As to how to comply with this litigated requirement, see this article: Who is a proper party in a North Carolina Lien Enforcement Action.

In North Carolina, a mechanics lien generally has priority over other encumbrances to the property attaching after the earliest of either 1) the lien filing; or 2) the Notice of Commencement. There is some controversy as to whether a contractor’s mechanic’s lien on real property or a bank holding the construction mortgage takes priority in a foreclosure action.  We discuss an appeals court’s clear explanation of this area of law, which previously had a bit of uncertainty, in the following article: Appeals Court Restores Sanity to North Carolina Lien Priority Jurisprudence.

Must the North Carolina Lien be Notarized?

No. North Carolina does not require that a mechanics lien be notarized in order to be valid.

North Carolina imposes no specific licensing requirement in order to file a valid mechanics lien. However, it is never a good idea to perform work for which a license is required without having the proper license.

Yes, a mechanics lien may be filed against a project involving a condominium, provided the lien claimant would otherwise have valid mechanics lien rights.

There is no specific provision in North Carolina stating which party is responsible for discharging a lien when the obligation underlying the lien is paid. The lien claimant of record, or the claimant’s agent or attorney, may acknowledge the satisfaction of the claim of lien on real property indebtedness, or the property owner may exhibit an instrument of satisfaction signed and acknowledged by the lien claimant of record which states that the claim of lien on real property indebtedness has been paid or satisfied.

North Carolina does not have statutory lien waiver forms; therefore, you can use any lien waiver form. Since lien waivers are unregulated, be careful when reviewing and signing lien waivers.

Also, North Carolina state law prohibits contractors and suppliers from waiving their right to file a mechanics lien in contract.

To learn more about lien waivers, see our North Carolina Lien Waiver FAQs and Resources.

North Carolina Preliminary Notice FAQs

Yes. North Carolina requires a preliminary notice to be sent to a “lien agent” (a title insurance company). However, a lien agent is not required on projects for which the original building permit was less than $30,000 or on an owner-occupied, single-family residence. Notice to Lien Agent must be made within 15 days from the potential lien claimant’s first furnishing of labor and/or materials to the project.  We discuss this requirement, which took effect April 1, 2013, in the following article:  Lien Agent: The Most Dramatic Change to North Carolina’s Mechanics Lien Laws.

North Carolina also provides a mechanism for a general contractor to protect himself from double payment liability through subrogation liens filed by second or third tier subcontractors. If the notice of contract is filed by the general contractor, the subcontractors and suppliers must file a notice of subcontract.

The Notice to Lien Agent must be sent within 15 days of the potential lien claimant’s first furnishing of labor and/or materials to the project.

If utilized, a Notice of Contract must be filed by the general contractor within 30 days after the building permit is issued for the project. The notice should be filed with the Clerk of Court in the county in which the property is located, and posted in a visible location at the project site adjacent to the posted building permit.

A Notice of Subcontract must be served on the general contractor to identify the lower tier subcontractor. There is no specific time requirement to serve the general with the notice of subcontract; it may be served prior to the furnishing of labor or materials or at anytime thereafter. However, the general contractor is only required to notify the sub of payments made after the receipt of the notice of subcontract. Therefore, the sooner it is filed, the better.

There has been no litigation yet related to the new notice provision as it went into effect on April 1, 2013. However, the express language of the requirement makes the failure to timely send the preliminary notice fatal to a lien claim. At the very least, it appears that the priority of the lien will be adversely affected if the requirement is considered valid.

If the general contractor fails to file and post the Notice of Contract in the required time period, he is not protected against potential double payment through subrogation liens filed by second or third tier subs or suppliers.

There is no set time requirement for serving the general contractor with the notice of subcontract. So in a strict sense, it cannot be late. However, a sub is only entitled to receive notice of payments made after the notice was given.

The preliminary notice may be sent by certified mail, return receipt requested (or other means providing notification of receipt). These notices may also be filed electronically with a new service that is operated by title insurance companies in North Carolina, LiensNC.com.  We explain how this service works and give it a review in these two articles:

The Notice of Contract must be filed with the Clerk of Court in the county in which the property is located, and posted in a visible location at the project site adjacent to the posted building permit.

The Notice of Subcontract must be provided to the general contractor – but no specific provision sets forth the manner in which he must be served. Best practice may be to send the notice by certified mail.

The Preliminary Notice to Lien Agent must be sent to the Lien Agent appointed in the building permit. If the building permit does not list the Lien Agent, any party may request that information and must receive a reply from the property owner within 7 days. Further, the general or any subcontractor is required to provide any supplier with whom they contract the name of the Lien Agent within 3 days of contracting with that supplier.

The Notice of Contract must be filed with the Clerk of Court of the county in which the property is located, and posted at the project site; the notice of subcontract must be provided to the general contractor.

It is unclear whether the Preliminary Notice to Lien Agent is considered delivered upon sending or receipt. However, the requirement that the notice be served via a method providing notice of actual receipt seems to indicate that the actual receipt of the notice is required.

Notice is considered filed when filed, and posted on the jobsite. It is not specified whether notice of subcontract is considered delivered when sent or received as there are no specific requirements as to how to send it.