By:  Alston F. Ludwig

Happy New Year!

As we enter 2014 holding tightly to signs of an improving economy, this may be the year you decide to develop property or renovate your existing office space. If that’s you, then we want to take a moment to remind you of the significant changes which occurred to North Carolina’s lien laws last year.  While it’s easy to think lien laws only affect contractors, subcontractors, and suppliers—and they do—the new changes to the lien laws also place obligations on owners of property.  So, whether you’re a second-tier subcontractor, a developer building a new office park, a landlord renovating a warehouse, or just someone wanting to build a new home in North Carolina, it’s likely the new lien laws affect you.  We’ve provided you with a brief overview of some of the more substantial changes.

Overview:

– The major changes in the laws involve the claim of lien on real property and not the claim of lien on  funds.

– An owner must designate a lien agent for any improvement to property that costs more than  $30,000.00.

– An owner may, but is not required to, designate a lien agent for any improvements to the owner’s  existing personal residence.

– After designating the lien agent, the owner must send written notice to the lien agent informing it of  the designation. Notice to the lien agent is automatically sent when an owner designates a lien agent  using www.liensnc.com

– www.liensnc.com will be the primary method whereby owners will designate lien agents and   potential lien claimants will provide notice to the lien agents.

– The lien agent’s contact information must be provided when applying for a permit. The information  will then appear in the permit and must be posted at the work site until construction is complete. If,  for some reason, the contact information is not listed in the permit, then it must be posted on another  sign until the construction is complete.

– If requested directly, the owner must provide a possible lien claimant with the lien agent’s contact  information within seven days of the request.

– Contractors and subcontractors must give lower-tier subcontractors the lien agent’s contact  information within three days of contracting.

– In order to protect a lien claimant’s rights, a lien claimant must give notice to the lien agent within  fifteen days after the first furnishing of labor or materials.

Filing a notice with a lien agent is not filing a claim of lien on real property. The notice ensures a lien claimant will be protected if the real property is sold or encumbered before the statutory deadline (120 days from the date of last furnishing) to file a claim of lien on real property. The requirements to perfect a claim of lien on real property have not been changed by the new laws. Continued compliance with those procedures is necessary.

This overview is not exhaustive and does not represent all of the changes which have occurred. But, hopefully, now you are more aware of the changes which are likely to affect you or your company. We intend to schedule free informational seminars on these new laws at which time we can offer a more in-depth explanation as well as helpful tips. Be on the lookout for scheduled dates in the near future.

For help concerning the new lien laws, please contact Douglas Wilson, Susan Barbour, or Alston Ludwig http://tinyurl.com/m9y4a6w at (828) 254-8800.