How do I have a lien removed from my property?
Full Question:
What do I need to do when someone files a lien on my property for work and supplies that he claims he has done? I have questioned his work and ask for a new invoice, which would delete the over charges.
04/15/2009 |
Category: Contractors » Construction... |
State: North Carolina |
#16026
Answer:
A lien is the right to retain the lawful possession of the property of another until the owner fulfills a legal duty to the person holding the property, such as the payment of lawful charges for work done on the property. The right of lien generally arises by operation of law, but in some cases it is created by express contract. Liens that arise in construction situations include construction liens, contractor liens, mechanic liens, attorney liens, architect liens and other liens applicable in your state. By virtue of express statutes in most states, mechanics and material men or persons who furnish materials for the erection of houses or other buildings, are entitled to a lien or preference in the payment of debts out of the houses and buildings so erected and to the land, to a greater or lessor extent, on which they are erected. In some states, a claim must be filed in the office of the clerk of the court or a suit brought within a limited time. In some states no lien is created unless the work done or the goods furnished amount to a certain specified sum, while in others there is no limit to the amount. In some states, contractors and subcontractors must notify the property owner prior to filing a lien, but in other states such liens can be filed without any notification to the owner.
The priority of liens on a construction project does not depend upon the time of completion of the particular job, but rather everything relates back to the first visible commencement of the work. Therefore, during the entire work of construction, the owner must obtain lien releases or waivers of lien from each subcontractor and material supplier. Without these waivers or releases the real estate is subject to liens of all the subcontractors, even if the general contractor, though paid in full, fails to pay the subcontractors. Lien claimants who are contractors or subcontractors are protected under this legal doctrine because all their materials and labor are "buried" in the real estate, having become part of it. Unlike mortgage liens, however, the liens of these claimants cannot force a foreclosure. People having a home built can require contractors and subcontractors to provide lien releases or waivers as part of a written project contract. The contract can mandate a lien release be issued before the contractor receives payment for services, in which case it is called a lien waiver. If payments are made to a general contractor in stages for work performed by subcontractors, the homeowner can obtain lien releases from the various subcontractors as their part of the project is completed. Sometimes, construction loan documents drafted by a bank may indicate that the bank will obtain lien releases, but the bank may do this solely for its own benefit. Therefore, the property owner's requiring lien releases should be clearly stated and independent of any agreement made by or with the bank.
Although the terms lien waiver and lien release seem to be interchangeable, a release demonstrates completion and payment, so as to prove any claim has been satisfied, while a waiver demonstrates a relinquishment of a known right. Waivers are typically obtained prior to commencement of any work, whereas releases are subsequently obtained. Waivers of lien must be in writing, give a sufficient description of the real estate, and be signed by the one with authority to file or claim a lien. No payment needs to be made in advance if the subcontractor agrees to release the land from the lien and rely only on the credit of the owner or general contractor for payment of the debt.
The filing requirements and statutes of limitation for liens vary according to the law of each state. Liens can generally be removed by the payment of the amount owed. This payment can occur at any time up to and including the stage at which the closing documents for the sale of the property are signed. Liens can be discharged after a certain length of time. Therefore, if a property owner is in no hurry to sell the property, and the lien holder is not seeking to foreclose, it may make sense to do nothing and wait until the lien expires. If the lien is not renewed, the cloud on the title will no longer exist. If a person pays and satisfies a lien in order to have it discharged, a written, legally sufficient release or satisfaction must be obtained and recorded in the appropriate government office to clear title to the property.
The following are North Carolina statutes:
§ 44A-8. Mechanics', laborers', and materialmen's lien; persons entitled
to claim of lien on real property.
Any person who performs or furnishes labor or professional design or
surveying services or furnishes materials or furnishes rental equipment
pursuant to a contract, either express or implied, with the owner of real
property for the making of an improvement thereon shall, upon complying
with the provisions of this Article, have a right to file a claim of lien
on real property on the real property to secure payment of all debts
owing for labor done or professional design or surveying services or
material furnished or equipment rented pursuant to the contract.
§ 44A-9. Extent of claim of lien on real property.
A claim of lien on real property authorized under this Article shall
extend to the improvement and to the lot or tract on which the
improvement is situated, to the extent of the interest of the owner. When
the lot or tract on which a building is erected is not surrounded at the
time of making the contract with the owner by an enclosure separating it
from adjoining land of the same owner, the lot or tract to which any
claim of lien on real property extends shall be the area that is
reasonably necessary for the convenient use and occupation of the
building, but in no case shall the area include a building, structure, or
improvement not normally used or occupied or intended to be used or
occupied with the building with respect to which the claim of lien on
real property is claimed.
§ 44A-10. Effective date of claim of lien on real property.
A claim of lien on real property granted by this Article shall relate
to and take effect from the time of the first furnishing of labor or
materials at the site of the improvement by the person claiming the claim
of lien on real property.
§ 44A-11. Perfecting claim of lien on real property.
A claim of lien on real property granted by this Article shall be
perfected as of the time provided in G.S. 44A-10 upon the filing of the
claim of lien on real property under G.S. 44A-12 and may be enforced
pursuant to G.S. 44A-13.
§ 44A-12. Filing claim of lien on real property.
(a) Place of Filing. — All claims of lien on real property must be
filed in the office of the clerk of superior court in each county where
the real property subject to the claim of lien on real property is
located. The clerk of superior court shall note the claim of lien on real
property on the judgment docket and index the same under the name of the
record owner of the real property at the time the claim of lien on real
property is filed. An additional copy of the claim of lien on real
property may also be filed with any receiver, referee in bankruptcy or
assignee for benefit of creditors who obtains legal authority over the
real property.
(b) Time of Filing. — Claims of lien on real property may be filed at
any time after the maturity of the obligation secured thereby but not
later than 120 days after the last furnishing of labor or materials at
the site of the improvement by the person claiming the lien.
(c) Contents of Claim of Lien on Real Property to Be Filed. — All
claims of lien on real property must be filed using a form substantially
as follows:
CLAIM OF LIEN ON REAL PROPERTY
(1) Name and address of the person claiming the claim of
lien on real property:
(2) Name and address of the record owner of the real
property claimed to be subject to the claim of lien
on real property at the time the claim of lien on
real property is filed:
(3) Description of the real property upon which the claim
of lien on real property is claimed: (Street address,
tax lot and block number, reference to recorded
instrument, or any other description of real property
is sufficient, whether or not it is specific, if it
reasonably identifies what is described.)
(4) Name and address of the person with whom the claimant
contracted for the furnishing of labor or materials:
(5) Date upon which labor or materials were first
furnished upon said property by the claimant:
(5a) Date upon which labor or materials were last furnished
upon said property by the claimant:
(6) General description of the labor performed or
materials furnished and the amount claimed therefor:
___________________________
Lien Claimant
Filed this _______ day of _______, _______
__________________________________________________
Clerk of Superior Court
A general description of the labor performed or materials furnished is
sufficient. It is not necessary for lien claimant to file an itemized
list of materials or a detailed statement of labor performed.
(d) No Amendment of Claim of Lien on Real Property. — A claim of lien
on real property may not be amended. A claim of lien on real property may
be cancelled by a claimant or the claimant's authorized agent or attorney
and a new claim of lien on real property substituted therefor within the
time herein provided for original filing.
(e) Notice of Assignment of Claim of Lien on Real Property. — When a
claim of lien on real property has been filed, it may be assigned of
record by the lien claimant in a writing filed with the clerk of superior
court who shall note the assignment in the margin of the judgment docket
containing the claim of lien on real property. Thereafter the assignee
becomes the lien claimant of record.
(f) Waiver of Right to File, Serve, or Claim Liens as Consideration for
Contract Against Public Policy. — An agreement to waive the right to file
a claim of lien on real property granted under this Part, or an agreement
to waive the right to serve a notice of claim of lien upon funds granted
under Part 2 of this Article, which agreement is in anticipation of and
in consideration for the awarding of any contract, either expressed or
implied, for the making of an improvement upon real property under this
Article is against public policy and is unenforceable. This section does
not prohibit subordination or release of a lien granted under this
Part or Part 2 of this Article.
§ 44A-13. Action to enforce claim of lien on real property.
(a) Where and When Action Commenced. — An action to enforce a claim of
lien on real property may be commenced in any county where venue is
otherwise proper. No such action may be commenced later than 180 days
after the last furnishing of labor or materials at the site of the
improvement by the person claiming the claim of lien on real property. If
the title to the real property against which the claim of lien on real
property is asserted is by law vested in a receiver or is subject to the
control of the bankruptcy court, the claim of lien on real property shall
be enforced in accordance with the orders of the court having
jurisdiction over said real property. The filing of a proof of claim with
a receiver or in bankruptcy and the filing of a notice of lis pendens in
each county where the real property subject to the claim of lien on real
property is located within the time required by this section satisfies the
requirement for the commencement of a civil action.
(b) Judgment. — A judgment enforcing a lien under this Article may be
entered for the principal amount shown to be due, not exceeding the
principal amount stated in the claim of lien enforced thereby. The
judgment shall direct a sale of the real property subject to the lien
thereby enforced.
(c) Notice of Action. — In order for the sale under G.S. 44A-14 (a) to
pass all title and interest of the owner to the purchaser good against all
claims or interests recorded, filed or arising after the first furnishing
of labor or materials at the site of the improvement by the person
claiming the claim of lien on real property, a notice of lis pendens
shall be filed in each county in which the real property subject to the
claim of lien on real property is located except the county in which the
action is commenced. The notice of lis pendens shall be filed within the
time provided in subsection (a) of this section for the commencement of
the action by the lien claimant. If neither an action nor a notice of lis
pendens is filed in accordance with this section, the judgment entered in
the action enforcing the claim of lien on real property shall not direct
a sale of the real property subject to the claim of lien on real property
enforced thereby nor be entitled to any priority under the provisions of
G.S. 44A-14 (a), but shall be entitled only to those priorities accorded
by law to money judgments.
§ 44A-14. Sale of property in satisfaction of judgment enforcing claim of
lien on real property or upon order prior to judgment; distribution of
proceeds.
(a) Execution Sale; Effect of Sale. — Except as provided in
subsection (b) of this section, sales under this Article and distribution of
proceeds thereof shall be made in accordance with the execution sale
provisions set out in G.S. 1-339.41 through 1-339.76. The sale of real
property to satisfy a claim of lien on real property granted by this
Article shall pass all title and interest of the owner to the purchaser,
good against all claims or interests recorded, filed or arising after the
first furnishing of labor or materials at the site of the improvement by
the person claiming a lien.
(b) Sale of Property upon Order Prior to Judgment. — A resident judge
of superior court in the district in which the action to enforce the
claim of lien on real property is pending, a judge regularly holding the
superior courts of the said district, any judge holding a session of
superior court, either civil or criminal, in the said district, a special
judge of superior court residing in the said district, or the chief judge
of the district court in which the action to enforce the claim of lien on
real property is pending, may, upon notice to all interested parties and
after a hearing thereupon and upon a finding that a sale prior to
judgment is necessary to prevent substantial waste, destruction,
depreciation or other damage to said real property prior to the final
determination of said action, order any real property against which a
claim of lien on real property under this Article is asserted, sold in
any manner determined by said judge to be commercially reasonable. The
rights of all parties shall be transferred to the proceeds of the sale.
Application for such order and further proceedings thereon may be heard in
or out of session.
§ 44A-15. Attachment available to lien claimant.
In addition to other grounds for attachment, in all cases where the
owner removes or attempts or threatens to remove an improvement from real
property subject to a claim of lien on real property under this Article,
without the written permission of the lien claimant or with the intent to
deprive the lien claimant of his or her claim of lien on real property,
the remedy of attachment of the property subject to the claim of lien on
real property shall be available to the lien claimant or any other
person.
§ 44A-16. Discharge of record claim of lien on real property.
Any claim of lien on real property filed under this Article may be
discharged by any of the following methods:
(1) The lien claimant of record, the claimant's agent or attorney, in
the presence of the clerk of superior court may acknowledge the
satisfaction of the claim of lien on real property indebtedness,
whereupon the clerk of superior court shall forthwith make upon the
record of such claim of lien on real property an entry of such
acknowledgment of satisfaction, which shall be signed by the lien
claimant of record, the claimant's agent or attorney, and witnessed by
the clerk of superior court.
(2) The owner may exhibit an instrument of satisfaction signed and
acknowledged by the lien claimant of record which instrument states that
the claim of lien on real property indebtedness has been paid or
satisfied, whereupon the clerk of superior court shall cancel the claim
of lien on real property by entry of satisfaction on the record of such
claim of lien on real property.
(3) By failure to enforce the claim of lien on real property within the
time prescribed in this Article.
(4) By filing in the office of the clerk of superior court the original
or certified copy of a judgment or decree of a court of competent
jurisdiction showing that the action by the claimant to enforce the claim
of lien on real property has been dismissed or finally determined
adversely to the claimant.
(5) Whenever a sum equal to the amount of the claim or claims of lien
on real property claimed is deposited with the clerk of court, to be
applied to the payment finally determined to be due, whereupon the clerk
of superior court shall cancel the claim or claims of lien on real
property or claims of lien on real property of record.
(6) Whenever a corporate surety bond, in a sum equal to one and
one-fourth times the amount of the claim or claims of lien on real
property claimed and conditioned upon the payment of the amount finally
determined to be due in satisfaction of said claim or claims of lien on
real property, is deposited with the clerk of court, whereupon the clerk
of superior court shall cancel the claim or claims of lien on real
property of record.
§ 44A-18. Grant of lien upon funds; subrogation; perfection.
Upon compliance with this Article:
(1) A first tier subcontractor who furnished labor, materials, or
rental equipment at the site of the improvement shall be entitled to a
lien upon funds that are owed to the contractor with whom the first tier
subcontractor dealt and that arise out of the improvement on which the
first tier subcontractor worked or furnished materials.
(2) A second tier subcontractor who furnished labor, materials, or
rental equipment at the site of the improvement shall be entitled to a
lien upon funds that are owed to the first tier subcontractor with whom
the second tier subcontractor dealt and that arise out of the improvement
on which the second tier subcontractor worked or furnished materials. A
second tier subcontractor, to the extent of the second tier
subcontractor's lien provided in this subdivision, shall also be entitled
to be subrogated to the lien of the first tier subcontractor with whom
the second tier contractor dealt provided for in subdivision (1) of this
section and shall be entitled to perfect it by notice of claim of lien
upon funds to the extent of the claim.
(3) A third tier subcontractor who furnished labor, materials, or
rental equipment at the site of the improvement shall be entitled to a
lien upon funds that are owed to the second tier subcontractor with whom
the third tier subcontractor dealt and that arise out of the improvement
on which the third tier subcontractor worked or furnished materials. A
third tier subcontractor, to the extent of the third tier subcontractor's
lien upon funds provided in this subdivision, shall also be entitled to
be subrogated to the lien upon funds of the second tier subcontractor
with whom the third tier contractor dealt and to the lien upon funds of
the first tier subcontractor with whom the second tier subcontractor
dealt to the extent that the second tier subcontractor is entitled to be
subrogated thereto, and in either case shall be entitled to perfect the
same by notice of claim of lien upon funds to the extent of the claim.
(4) Subcontractors more remote than the third tier who furnished
labor, materials, or rental equipment at the site of the improvement
shall be entitled to a lien upon funds that are owed to the person with
whom they dealt and that arise out of the improvement on which they
furnished labor, materials, or rental equipment, but such remote tier
subcontractor shall not be entitled to subrogation to the rights of other
persons.
(5) The liens upon funds granted under this section shall secure
amounts earned by the lien claimant as a result of having furnished
labor, materials, or rental equipment at the site of the improvement
under the contract to improve real property, including interest at the
legal rate provided in G.S. 24-5, whether or not such amounts are due and
whether or not performance or delivery is complete. In the event
insufficient funds are retained to satisfy all lien claimants,
subcontractor lien claimants may recover the interest due under this
subdivision on a pro rata basis, but in no event shall interest due under
this subdivision increase the liability of the obligor under G.S.
44A-20.
(6) A lien upon funds granted under this section is perfected upon the
giving of notice of claim of lien upon funds in writing to the obligor as
provided in G.S. 44A-19 and shall be effective upon the obligor's receipt
of the notice. The subrogation rights of a first, second, or third tier
subcontractor to the claim of lien on real property of the contractor
created by Part 1 of Article 2 of this Chapter are perfected as provided
in G.S. 44A-23.
§ 44A-19. Notice of claim of lien upon funds.
(a) Notice of a claim of lien upon funds shall set forth all of the
following information:
(1) The name and address of the person claiming the lien upon funds.
(2) A general description of the real property improved.
(3) The name and address of the person with whom the lien claimant
contracted to improve real property.
(4) The name and address of each person against or through whom
subrogation rights are claimed.
(5) A general description of the contract and the person against whose
interest the lien upon funds is claimed.
(6) The amount of the lien upon funds claimed by the lien claimant
under the contract.
(b) All notices of claims of liens upon funds by first, second, or
third tier subcontractors must be given using a form substantially as
follows:
NOTICE OF CLAIM OF LIEN UPON FUNDS BY
FIRST, SECOND, OR THIRD TIER SUBCONTRACTOR
To:
1. __________________________, owner of property involved.
(Name and address)
2. __________________________, general contractor.
(Name and address)
3. __________________________, first tier subcontractor
(Name and address) against or through whom
subrogation is claimed, if any.
4. __________________________, second tier subcontractor
(Name and address) against or through whom
subrogation is claimed, if any.
General description of real property where labor performed or
material furnished:
__________________________________________________________________________________________________________________
General description of undersigned lien claimant's contract
including the names of the parties thereto:
_________________________________________________________
_________________________________________________________
The amount of lien upon funds claimed pursuant to the above
described contract: $ _________________________
The undersigned lien claimant gives this notice of claim of
lien upon funds pursuant to North Carolina law and claims
all rights of subrogation to which he is entitled under
Part 2 of Article 2 of Chapter 44A of the General Statutes
of North Carolina.
Dated __________
____________________, Lien Claimant
__________________________________
(Address)
(c) All notices of claims of liens upon funds by subcontractors more
remote than the third tier must be given using a form substantially as
follows:
NOTICE OF CLAIM OF LIEN UPON FUNDS BY SUBCONTRACTOR
MORE REMOTE THAN THE THIRD TIER
To:
______________________________, person holding funds against
(Name and Address)
which lien upon funds is claimed.
General description of real property where labor performed
or material furnished:
__________________________________________________________________________________________________________________________
_____________________________________________________________
General description of undersigned lien claimant's contract
including the names of the parties thereto:
_____________________________________________________________
_____________________________________________________________
The amount of lien upon funds claimed pursuant to the above
described contract: $ _________________________
The undersigned lien claimant gives this notice of claim of
lien upon funds pursuant to North Carolina law and claims
all rights to which he or she is entitled under Part 2 of
Article 2 of Chapter 44A of the General Statutes of North
Carolina.
Dated: __________
____________________, Lien Claimant
__________________________________
(Address)
(d) Notices of claims of lien upon funds under this section shall be
served upon the obligor by personal delivery or in any manner authorized
by Rule 4 of the North Carolina Rules of Civil Procedure. A copy of the
notice of claim of lien upon funds shall be attached to any claim of lien
on real property filed pursuant to G.S. 44A-20 (d) or G.S. 44A-23.
(e) Notices of claims of lien upon funds shall not be filed with the
clerk of superior court and shall not be indexed, docketed, or recorded
in any way as to affect title to any real property, except a notice of a
claim of lien upon funds may be filed with the clerk of superior court
under either of the following circumstances:
(1) When the notice of claim of lien upon funds is attached to a claim
of lien on real property filed pursuant to G.S. 44A-20 (d) or G.S.
44A-23.
(2) When the notice of claim of lien upon funds is filed by the obligor
for the purpose of discharging the claim of lien upon funds in accordance
with G.S. 44A-20 (e).
(f) Filing a notice of claim of lien upon funds pursuant to
subsection (e) of this section is not a violation of G.S. 44A-12.1.
§ 44A-20. Duties and liability of obligor.
(a) Upon receipt of the notice of claim of lien upon funds provided for
in this Article, the obligor shall be under a duty to retain any funds
subject to the lien or liens upon funds under this Article up to the
total amount of such liens upon funds as to which notices of claims of
lien upon funds have been received.
(b) If, after the receipt of the notice of claim of lien upon funds to
the obligor, the obligor makes further payments to a contractor or
subcontractor against whose interest the lien or liens upon funds are
claimed, the lien upon funds shall continue upon the funds in the hands
of the contractor or subcontractor who received the payment, and in
addition the obligor shall be personally liable to the person or persons
entitled to liens upon funds up to the amount of such wrongful payments,
not exceeding the total claims with respect to which the notice of claim
of lien upon funds was received prior to payment.
(c) If an obligor makes a payment after receipt of notice of claim of
lien on funds and incurs personal liability under subsection (b) of this
section, the obligor shall be entitled to reimbursement and
indemnification from the party receiving such payment.
(d) If the obligor is an owner of the property being improved, the lien
claimant shall be entitled to a claim of lien upon real property upon the
interest of the obligor in the real property to the extent of the owner's
personal liability under subsection (b) of this section, which claim of
lien on real property shall be enforced only in the manner set forth in
G.S. 44A-7 through G.S. 44A-16 and which claim of lien on real property
shall be entitled to the same priorities and subject to the same filing
requirements and periods of limitation applicable to the contractor. The
claim of lien on real property is perfected as of the time set forth in
G.S. 44A-10 upon the filing of the claim of lien on real property
pursuant to G.S. 44A-12. The claim of lien on real property shall be in
the form set out in G.S. 44A-12 (c) and shall contain, in addition, a copy
of the notice of claim of lien upon funds given pursuant to G.S. 44A-19
as an exhibit together with proof of service thereof by affidavit, and
shall state the grounds the lien claimant has to believe that the obligor
is personally liable for the debt under subsection (b) of this section.
(e) A notice of claim of lien upon funds under G.S. 44A-19 may be filed
by the obligor with the clerk of superior court in each county where the
real property upon which the filed notice of claim of lien upon funds is
located for the purpose of discharging the notice of claim of lien upon
funds by any of the methods described in G.S. 44A-16.
(f) A bond deposited under this section to discharge a filed notice of
claim of lien upon funds shall be effective to discharge any claim of
lien on real property filed by the same lien claimant pursuant to
subsection (d) of this section or G.S. 44A-23 and shall further be
effective to discharge any notices of claims of lien upon funds served by
lower tier subcontractors or any claims of lien on real property filed by
lower tier subcontractors pursuant to subsection (d) of this section or
G.S. 44A-23 claiming through or against the contractor or higher tier
subcontractors up to the amount of the bond.
§ 44A-21. Pro rata payments.
(a) Where the obligor is a contractor or subcontractor and the funds in
the hands of the obligor and the obligor's personal liability, if any,
under G.S. 44A-20 are less than the amount of valid liens upon funds that
have been received by the obligor under this Article, the parties
entitled to liens upon funds shall share the funds on a pro rata basis.
(b) Where the obligor is an owner and the funds in the hands of the
obligor and the obligor's personal liability, if any, under G.S. 44A-20
are less than the sum of the amount of valid claims of liens upon funds
that have been received by the obligor under this Article and the amount
of the valid claims of liens on real property upon the owner's property
filed by the subcontractors with the clerk of superior court under G.S.
44A-23, the parties entitled to liens upon funds and the parties entitled
to subrogation claims of liens on real property upon the owner's property
shall share the funds on a pro rata basis.
§ 44A-22. Priority of liens upon funds.
Liens upon funds perfected under this Article have priority over all
other interests or claims theretofore or thereafter created or suffered
in the funds by the person against whose interest the lien upon funds is
asserted, including, but not limited to, liens arising from garnishment,
attachment, levy, judgment, assignments, security interests, and any
other type of transfer, whether voluntary or involuntary. Any person who
receives payment from an obligor in bad faith with knowledge of a lien
upon funds shall take such payment subject to the lien upon funds.
§ 44A-23. Contractor's claim of lien on real property; perfection of
subrogation rights of subcontractor.
(a) First tier subcontractor. — A first tier subcontractor, who gives
notice of claim of lien upon funds as provided in this Article, may, to
the extent of this claim, enforce the claim of lien on real property of
the contractor created by Part 1 of this Article. The manner of such
enforcement shall be as provided by G.S. 44A-7 through 44A-16. The claim
of lien on real property is perfected as of the time set forth in G.S.
44A-10 upon filing of the claim of lien on real property pursuant to
G.S. 44A-12. Upon the filing of the claim of lien on real property, with
the notice of claim of lien upon funds attached, and the commencement of
the action, no action of the contractor shall be effective to prejudice
the rights of the subcontractor without his written consent.
(b) Second or third subcontractor. —
(1) A second or third tier subcontractor, who gives notice of claim of
lien upon funds as provided in this Article, may, to the extent of his
claim, enforce the claim of lien on real property of the contractor
created by Part 1 of Article 2 of the Chapter except when:
a. The contractor, within 30 days following the date the building
permit is issued for the improvement of the real property involved, posts
on the property in a visible location adjacent to the posted building
permit and files in the office of the clerk of superior court in each
county wherein the real property to be improved is located, a completed
and signed notice of contract form and the second or third tier
subcontractor fails to serve upon the contractor a completed and signed
notice of subcontract form by the same means of service as described in
G.S. 44A-19 (d); or
b. After the posting and filing of a signed notice of contract and the
service upon the contractor of a signed notice of subcontract, the
contractor serves upon the second or third tier subcontractor, within
five days following each subsequent payment, by the same means of service
as described in G.S. 44A-19 (d), the written notice of payment setting
forth the date of payment and the period for which payment is made as
requested in the notice of subcontract form set forth herein.
(2) The form of the notice of contract to be so utilized under this
section shall be substantially as follows and the fee for filing the same
with the clerk of superior court shall be the same as charged for filing
a claim of lien on real property:
"NOTICE OF CONTRACT
"(1) Name and address of the Contractor:
"(2) Name and address of the owner of the real property at
the time this Notice of Contract is recorded:
"(3) General description of the real property to be
improved (street address, tax map lot and block number,
reference to recorded instrument, or any other description
that reasonably identifies the real property):
"(4) Name and address of the person, firm or corporation
filing this Notice of Contract:
"Dated: ____________________
______________________________
"Contractor
"Filed this the ________ day of ________________, ________
__________________________
Clerk of Superior Court"
(3) The form of the notice of subcontract to be so utilized under this
section shall be substantially as follows:
"NOTICE OF SUBCONTRACT
"(1) Name and address of the subcontractor:
"(2) General description of the real property where the
labor was performed or the material was furnished (street
address, tax map lot and block number, reference to
recorded instrument, or any description that reasonably
identifies the real property):
"(3)
"(i) General description of the subcontractor's
contract, including the names of the parties
thereto:
"(ii) General description of the labor and material
performed and furnished thereunder:
"(4) Request is hereby made by the undersigned
subcontractor that he be notified in writing by the
contractor of, and within five days following, each
subsequent payment by the contractor to the first tier
subcontractor for labor performed or material furnished at
the improved real property within the above descriptions of
such in paragraph (2) and subparagraph (3)(ii),
respectively, the date payment was made and the period for
which payment is made.
"Dated: ______________________
________________________________
Subcontractor"
(4) The manner of such enforcement shall be as provided by G.S. 44A-7
through G.S. 44A-16. The lien is perfected as of the time set forth in
G.S. 44A-10 upon the filing of a claim of lien on real property pursuant
to G.S. 44A-12. Upon the filing of the claim of lien on real property,
with the notice of claim of lien upon funds attached, and the
commencement of the action, no action of the contractor shall be
effective to prejudice the rights of the second or third tier
subcontractor without his written consent.
As previously mentioned, in order for an owner to not be liable to each subcontractor and material supplier, he or she must obtain lien releases or waivers of liens from each subcontractor and material supplier. Without these waivers or releases the real estate is subject to liens of all the subcontractors, even if the general contractor, though paid in full, fails to pay the subcontractors. Liens can generally be removed by the payment of the amount owed or liens can be discharged after a certain length of time if the lien is not renewed.
Please review the North Carolina statutes we provided you in the earlier email to determine your specific rights and obligations regarding payment to the subcontractor or supplier, which will generally depend on whether you obtained waivers or releases from the subcontractor or supplier, and whether the subcontractor or supplier correctly filed a lien according to statutory requirements. Unfortunately, we cannot provide legal advice regarding your specific circumstances. You may wish to seek the advice of a local attorney by using our attorney directory at http://lawyers.uslegal.com/construction/north-carolina/
