Mechanics liens

North Carolina mechanics lien law and deadlines

In North Carolina you file a claim of lien with the clerk of superior court within 120 days after your last furnishing and sue within 180 days. On jobs with a lien agent, a Notice to Lien Agent within 15 days of first furnishing protects your rights against a sale or new loan.

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North Carolina's mechanics lien law is Chapter 44A, Article 2 of the General Statutes. Two deadlines anchor everything: a claim of lien on real property must be filed with the clerk of superior court no later than 120 days after your last furnishing of labor or materials at the site (G.S. 44A-12), and the action to enforce it must start no later than 180 days after that same last furnishing (G.S. 44A-13). On most private jobs of $40,000 or more, the owner must appoint a lien agent, and claimants who send a Notice to Lien Agent within 15 days of first furnishing keep their full protection against later buyers and lenders.

North Carolina lien deadlines at a glance
StepDeadline or ruleStatute
Lien agent appointed by ownerRequired when improvement costs are $40,000 or more (exemptions for an owner-occupied existing single-family home and public projects)44A-11.1
Notice to Lien AgentNo later than 15 days after first furnishing for full protection; later notice still counts if given before a sale or new mortgage is recorded44A-11.2
Claim of lien on real propertyNo later than 120 days after last furnishing, filed with the clerk of superior court44A-12
Serve the claimOn the record owner (and the contractor, for subrogated claims) as part of perfection44A-11
Enforcement actionNo later than 180 days after last furnishing44A-13
Public projectsNo lien on the property; 100 percent payment bond when project contracts exceed $300,000 ($500,000 for state agencies and UNC)44A-26

Who has lien rights in North Carolina

A party that contracts directly with the owner gets a lien on the real property under G.S. 44A-8. That covers general contractors, but also anyone who furnishes labor, professional design or surveying services, materials, or rental equipment under a contract with the owner. The definition of "improve" in 44A-7 expressly includes registered architects, engineers, land surveyors, and landscape architects, along with equipment rental used on the site.

Subcontractors work through a different mechanism. Under 44A-18, first, second, and third tier subs who furnished labor, materials, or rental equipment at the site have a lien upon funds owed to the party above them, perfected by serving a notice of claim of lien upon funds. Once the owner or other obligor receives that notice, 44A-20 requires it to hold the funds, and paying past the notice makes it personally liable. Under 44A-23, a first tier sub can also enforce the GC's claim of lien on the real property by subrogation, and second and third tier subs can too unless the owner or GC used the notice of contract procedure that statute describes.

Lien agents and the Notice to Lien Agent

North Carolina's version of a preliminary notice runs through a lien agent, a title insurance company registered with the Department of Insurance. Under 44A-11.1, the owner must designate one for improvements costing $40,000 or more, no later than first contracting for the work. There is no lien agent requirement for improvements to an existing single-family dwelling occupied by the owner as a residence, or for an accessory building to it. The LiensNC online system, which the registered lien agents use, also lists public building projects as exempt and notes that filing a Notice to Lien Agent is free.

  • Where to find the agent. The building permit or a sign posted on the site should show the lien agent's contact information (44A-11.2(d) and (e)). If not, ask the owner in writing; the owner has seven days to answer.
  • Pass it down. A contractor or sub must give lien agent contact information to an off-site lower-tier sub within three business days of contracting with it, or be liable for that sub's actual damages.
  • The 15-day rule. Under 44A-11.2(l), a claimant can perfect its lien if the lien agent received its notice within 15 days after first furnishing. If not, the lien still works only if the notice reached the lien agent, or the lien was perfected, before a conveyance to a good-faith buyer was recorded.
  • Lenders. Under 44A-11.2(m), a lien not perfected before a new deed of trust is recorded is subordinate to it, unless the notice went in within 15 days of first furnishing or before the deed of trust was recorded.

Filing the claim of lien and enforcing it

The claim of lien goes to the clerk of superior court in each county where the property is located, using the form in 44A-12(c): claimant, record owner, property description, the party you contracted with, first and last furnishing dates, and a general description of the work and amount claimed. The claim cannot be amended, though it can be canceled and refiled within the original 120 days. Perfection under 44A-11 also requires serving a copy on the record owner, by personal delivery or by mail or an authorized delivery service.

The enforcement suit has to be filed within 180 days of last furnishing, and the judgment cannot exceed the principal amount stated in the claim. Say a drywall contractor last worked on a $1.2 million medical office on June 10 and is owed $64,000. The claim is due by early October and the lawsuit by early December. Mark both dates the day the crew leaves.

Lien waivers in North Carolina

North Carolina does not publish a mandatory statutory lien waiver form, and LiensNC refers questions about waivers and releases to a North Carolina attorney. The statute does ban one practice: under 44A-12(f), an agreement to waive the right to file a claim of lien, or to serve a notice of claim of lien upon funds, made in anticipation of and as consideration for getting a contract, is against public policy and unenforceable. Subordinations and releases tied to payment are still allowed.

Residential work

The biggest residential difference is the lien agent exemption for an owner-occupied existing single-family home. On those jobs there is no Notice to Lien Agent to send, but the 120-day filing and 180-day suit deadlines still apply. New custom homes are different: they are not "existing" dwellings, and 44A-11.2(g) lets a licensed custom contractor designate the lien agent on the owner's behalf.

Public projects use payment bonds instead

Public property cannot be liened. Under Article 3 of Chapter 44A, G.S. 44A-26 requires a performance bond and a payment bond, each for 100 percent of the contract amount, when the total construction contracts on a project exceed $300,000, from any contractor or construction manager at risk with a contract over $50,000. For state departments and agencies and the UNC system, the threshold is $500,000. See North Carolina prevailing wage and North Carolina prompt payment rules for the rest of the public-work picture.

Frequently asked questions

How long do I have to file a mechanics lien in North Carolina?

No later than 120 days after your last furnishing of labor or materials at the site, filed with the clerk of superior court in the county where the property is located.

When do I have to sue to enforce a North Carolina lien?

No later than 180 days after your last furnishing of labor or materials at the site.

Does North Carolina require a preliminary notice?

On jobs with a lien agent, you should give a Notice to Lien Agent within 15 days of first furnishing. Later notice still helps if it reaches the lien agent before the property is sold or a new deed of trust is recorded.

When is a lien agent required in North Carolina?

When the cost of the improvements is $40,000 or more, except for improvements to an existing owner-occupied single-family home and public projects.

Can a subcontract make me waive my North Carolina lien rights in advance?

No. An advance waiver given to get the contract is unenforceable under G.S. 44A-12(f). Releases and subordinations tied to payment are allowed.

Sources

  1. North Carolina General Assembly: G.S. Chapter 44A, Article 2, Statutory Liens on Real Property (archived copy)
  2. North Carolina General Assembly: G.S. 44A-26, bonds required (archived copy)
  3. LiensNC: Exemptions
  4. LiensNC: Frequently asked questions

Laws and rates change. Confirm current requirements with the state agency before you bid, file, or pay. This page is general information, not legal advice.

Written and edited by

Maurice Francois writes and edits construction operations guides for Smart Business Automator. More from Maurice on the Scaling Legends podcast.

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