How to File a Mechanics Lien in North Carolina Under the New Laws
As you may have heard, there have been major changes to a mechanic’s lien in North Carolina under SB 42 and HB 1052 affective January 01, 2013. The basic structure remains the same, but there have been some mandatory changes which you should keep in mind.
Offsite Design and Fabrication. Under section 44A-7, a North Carolina mechanic’s lien can now be filed for work in the design and fabrication of offsite material, systems, or equipment, whether delivered or not, which are intended to be added to the improvement. In the past, there was a requirement that such material not only had to be delivered, but installed or incorporated into the very improvement. But this was unfair, because many times specially fabricated material, which could not be used on other jobs, was completed offsite, but then the owner changed his or her mind and decided not to use it—paying for same. Here are some examples:
- Cabinets. Joe is a licensed general contractor but also has a small cabinetry shop where he custom fabricates kitchen cabinets for his projects. They are one of a kind as to the type of wood, design, and staining. If he constructs them and they do not end up on the site because of a disagreement, he can still record a mechanic’s lien in North Carolina.
- Metal Stairwell. Mike is a metal fabricator and is working on a wrought iron stairway (balusters) with wood railings to be installed between the ground floor and mezzanine of a small office building. He has had nothing but problems with the project manager with constant changes to field directives, demanding new shop drawings, modifying design and dimensions, and then finally scrapping the whole project in deciding upon all wood construction. Frank has this one-of-a-kind system that is collecting dust in his warehouse. Fortunately, he can now file a North Carolina lien.
Serving Notices. For purposes of a mechanic’s lien in North Carolina, service of notices is usually done by certified mail. But what if the recipient refuses to sign? Does delivery still occur? North Carolina mechanic’s lien statutes now state anyone who refuses to sign for the certified mail does so at their peril. It is still considered served. Make sure you keep the post office certified mail receipt showing the amount paid and the date mailed.
Notice of Commencement. Section 44A-9.1 is a new provision which requires the owner to file and post at the project site a Notice of Commencement. This must have a name and address of the owner and general, so subs and suppliers can use this information for their pre-lien and North Carolina mechanic’s lien filings.
North Carolina Mechanics Lien Contents. The North Carolina lien no longer requires a statement as to the date of first furnishing labor or materials. This was somewhat of a hassle, because some people forgot to include it or we were uncertain as to that exact date. Was it the date of delivery, labor first performed, demolition, grading, grabbing or staking, and was preparatory work included? You know longer need the guess as to these matters.
A North Carolina mechanic’s lien form now requires you to insert the date in which you filed a Notice to Owner. Although some states require furnishing an actual copy, this is not required. You simply have to recite the date the notice was served.
Subcontractor’s Notice to Owner. Section 44A 17.1 of the North Carolina mechanic’s lien statutes now has a brand new form to be served by subcontractors. It is called the Subcontractor’s Notice to Owner. You serve the owner and general contractor by certified mail within 30 days of first furnishing labor or materials. But all is not lost, because if you serve it late, you can include in your North Carolina lien unpaid services performed within 30 days of service of the notice. However, this is a mandatory pre-lien notice before recording your mechanic’s lien in North Carolina.